by David Chapman
Staff Writer
For most real estate offices, bigger is better. But many companies have discovered that bigger doesn’t necessarily have to mean more expensive.
In a slow market, some real estate firms are building larger offices with the idea of expanding down the line. With the idea for future flexibility, many say it’s easier to build larger buildings initially than to add on a wing or a floor later as a firm grows.
But until companies fill out their new digs, many recoup costs and attract potential clients by renting out office space to other businesses.
“It helps you in your land cost,” said Bill Watson, founder of Watson Realty. “We have for years built larger buildings for flexibility to expand.”
With an eye toward the future, others like Watson are also leasing out space. The demand, especially in newer buildings, such as Davidson Realty’s 17,200-square-foot office at the World Golf Village, is high.
“We have 10 executive suites,” said Sherry Davidson of Davidson Realty, “and all 10 we leased out before we moved in. In fact, one company leased three and had the option to cancel within 60 days. They ended up canceling two of them, but they filled back up quickly.”
Other companies are also seeing a demand for space.
“Our new office in Palm Coast has three vacant spots,” said Walter Williams, founder of Coldwell Banker Walter Williams. “There’s been a lot of discussion with doctor’s, lending offices, banks and the like.”
The new tenants vary in profession, ranging from mortgage and title companies to doctors, attorneys and even a hair specialist.
“If we feel a tenant is an asset to us,” said Watson, “we’re going to go out of our way to make sure it is a win-win situation.”
Leases vary on tenants, with some companies like Davidson Realty agreeing to one year leases, while others such as Watson and Coldwell Banker Walter Williams use leases that reach as high as five years.
The interaction between real estate offices and the tenants on a day-to-day basis is something that is also looked at when leasing out space.
“It’s a good relationship,” he said. “Their customers do not cause problems. They bring in customers and a good clientele that complements our business.”
Williams agreed with that sentiment.
“I would say it’s been a positive experience,” said Williams.
Sometimes, however, the tenants rarely interact with the company.
“We pretty much keep them separate,” said Davidson. “We have different entrances and such. But we do go back and forth with the title company sometimes.”
There has been some instance when things didn’t always go smoothly, though.
“I know we’ve made some mistakes,” said Watson with a laugh. “We chalk it up to a learning experience.”
Watson said the only problems he has run into are parking related. While he encourages his own employees not to occupy prime spots in the parking lot, the other businesses don’t always encourage the same protocol.
Often times, Watson said, his hungry Realtors make suggestions on who to lease to.
“They joke and say ‘Put in a nice little restaurant or cafe,’” he said. “but I try to keep business professionals as the tenants.”