Vacancy is over 20% on a direct basis and closer to 30% when sublease space is included. "It's very, very competitive, rates are off 15% to 20%," says Hayes. "There hasn't really been much in the way of demand so there's not a lot of information on the concessions being offered, but if you were to go out into the market with a user, you would likely get them."
Marcy tells GlobeSt.com he's heard of six months free rent being offered, but the best deals right now are for "plug-and-play" space -- space already outfitted with desks and phones and such. The availability of such space is making it real hard to lease up first generation space.
One good example here would be Birtcher Real Estate Group's AmberGlen Business Center, where a brand new class A office building that needs to sign tenants at upward of $22.50 per sf, full service, is looking mighty expensive next to its slightly older twin, in which the Internet company Webridge is offering whole floors for sublease at a full-service rate of $18 per sf.
Synopsys' building is being marketed at $23.50 per sf, full service, but it includes use of the campus' fitness trail and basketball and beach volleyball courts, and doesn't account for the fact that "there is room for negotiation," says Marcy, adding that there's no sense in continuing to lower asking rents because it really isn't a price issue, it's a demand issue that can't be solved by six months of free rent.
"My advice to landlords is to hold firm on price, assuming they're already at a rate that will allow them to see all the potential deals," says Marcy. "You need to make sure you're in the ballgame and make sure that the message out there is you will compete and compete hard for deals."
For brokers, the relatively tenantless climate means higher commissions. Brokers bringing in tenants are getting a full 5% fee from owners instead of having to split with the owner's representative, which means landlords are paying out as much as 8% on the gross deal value.
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