Recession, recession, recession!  There, I said it.  We're in one.  Don't let the government or the landlord reps mislead you.

It doesn't effect all business directly, and is certainly selective in its targeting of particular industries.  Anyone with interests related to residential real estate is getting hammered, and the trickle-down effect is reaching out to financial markets, retailers, and distributors.  The government is trying to bolster home prices and lessen the effects of oil inflation, and the jury is still out on the long term forecast. 

Here's what I like about it:

1.  Appreciation - Even the most arrogant developers and property investors have realized that the real estate market doesn't have to rise endlessly. They are appreciating once again that the value of their property is created not by virtue of their astute eye for recognizing a bargain, instead realizing it comes from the income stream that is provided by the space user.

2.  Availability - For some of my clients with large space requirements, the only options for additional space used to be relocate (because existing buildings/sites/developers were at 100% occupancy) and build (because there were no large blocks of space sitting on the market - at least not for long).  Now, finally, there are usually several decent options in most markets.  That is a very good thing.

3.  Improved Rental Rates - I'm optimistic that the economy will get worse before it gets better.  That's good news from a corporate space user's perspective.  Rents have not declined significantly because most leases range from 5 - 10 years and we simply have not had enough time to cycle through expirations .  Certainly there has been some downsizing and there is a healthy supply of sublease space on the market.  However, there is also a substantial amount of "phantom" or "shadow" vacancy - spaces that are grossly underutilized by a firm that has chosen not to sublease or restructure their existing lease because dividing the space may be difficult, they're hoping for a short correction period, or they're not efficient enough to have a proactive plan to solve the issue.

So what's the best strategy?  Well, that depends on your industry, market share, and perhaps geography.  Remember that this is a cycle, we're not at the bottom yet, and you'll want to position yourself to lock into better rates and negotiate expansion options when things get more desperate for landlords - perhaps a year or so further out.  Rents overall will decline and, after all, less is more.