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Last Updated: Apr 20th, 2005 - 18:45:27 |
The amount of so-called "plug-and-play" office and research and development space available in the San Francisco Bay area has been on the decline for some time now, but analysts say the space that remains continues to draw significant leasing demand.
Plug-and-play space is furnished and wired space that often serves as a combination of office and manufacturing space. Such sites tend to be popular with technology firms.
Plug-and-play R&D space now accounts for less than a third of the available space on the market for lease, yet it accounted for almost half of the 1.7 million square feet of total R&D space leased in the third quarter, according to a report by Cornish & Carey Commercial/Oncor International.
Earlier this week, Aruba Wireless Networks Inc. moved its headquarters into a 52,000-square-foot facility in Sunnyvale, Calif. Company officials say the fact that the building's furnished office and manufacturing space was ready for move-in was a big factor in deciding to relocate from Silicon Valley.
This is an emerging trend in the industry that has yet to take hold in the Midwest. For the past few years in Middle America, tenants have been taking advantage of sublease opportunities and landlords have been happy to stay away from the business of completing “the last improvements” that have traditionally been made at the tenant’s expense. A disciplined approach to these types of plug and play opportunities can save substantial dollars in furnishings, communications and time for the savvy and well positioned tenant. We predict that as the office environment becomes more standardized, sophisticated and aggressive landlords with cash and/or lots of space to fill will be providing more plug and play in major markets.
Source: Wall Street Journal (10/20/04); Muto, Sheila
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