OK I live near Fullerton which is a big street in Chicago
In 2008 they built a very nice set of condos. About 50 in all. The first floor covers about two blocks. On the first (or ground) floor are store or offices. Well now they are empty spaces, but clearly they could be used as offices or for small stores, like a florist, or dental office or whatever.
Here’s my questions on all but one of the storefronts there is a sign that says “This space leased.” The one that doesn’t have that sign says "To lease this space call, XXX-XXX-XXXX).
ALL the storefronts or officefronts, or whatever you call them, are empty. You can look into them and see. It’s 2011 and this building was finished in January of 2008. You can see the condos above them are occupied. They look like nice condos. So the building is selling the condos but not the first floor office space.
So why do the signs say “leased” on the office spaces? Or does the leased refer to the condos above it, even though it’s on the storefront?
It looks pretty stupid to put “leased” on obviously empty stores, especially since they’ve been empty for years and there is a LOT of other empty stores up and down Fullerton.
Weird things can happen. If the property owner isn’t indicating that the office space is available that almost certainly means they are receiving rent for it.
If it is office space one common thing is a large company might buy some office space for a satellite office. However all kinds of bureaucratic bullshit goes on and the space is sitting there being paid for sometimes for months or even years before the company actually gets off its ass and gets the place configured for move in and actually starts assigning people to work in the new space.
It’s possible that the landlord is playing a game to make potential tenants thing they’re about to be surrounded by other traffic-generating stores and that only one space is left. Condo developers often claim presales percentages far beyond the truth. But any national credit tenant is going to insist on seeing the letters of intent from the other clients.
More likely, a couple of branch locations (AT&T, Fifth Third Bank, Chipotle, Haircuttery) took the space but are delaying opening the shop until the economy improves.
My daughter works for a commercial real estate company, and it’s not unusual for them to manage leased, but vacant, properties.
Sometimes the leaseholder never moved in because the business climate wasn’t what they thought it would be, or closed down operations at that location. Sometimes, they outgrew the space, or couldn’t fill it. Often, the lease won’t allow subleasing, so the leaseholder is stuck until for the entire term.
I’m thinking Martin might be on the right track. GigantoCorp took out a long term lease on the space but plans changed, or were changed for them, before they began the build out and move in. They crunched the numbers and decided it was cheaper to abide by the original terms rather than breaking them.
And who knows? Plans might change again and they’ll go ahead and move in.
It wouldn’t surprise me to see a space has been leased but the tenant never moved in due to the economy. I know of a 120K sf building around here that was leased but the tenant fell on hard times and never expanded into the property. Over the years, they sub-leased some of the space but without filing for bankruptcy, they were still on the hook for the full rent.