Patrick Foley

Just for those of you that aren't aware, the City of Austin has a new law going into effect on June 1, 2009 that will affect everyone buying or selling a home or commercial property built more than 10 years ago. As a result, you will have to have an energy audit performed on the property before the sale can go through. This will be required of all Austin Energy users. The cost is estimated around $350 - $400 for a 2500 SF home, but will obviously be much more expensive for large commercial properties.

I'm all about being green and energy efficient, but I think it needs to be an individual choice, not forced on you by the government at any level. However, it doesn't matter what I think! Just in case you were thinking of skipping out on this extra cost, the penalty from the city will set you back $2,000.

Today I was fortunate enough to take a trip to La Grange, Texas which is about 70 miles from where I live in Austin. I say forunate because the weather is phenomenal, and I rode most of the way with my windows down and because I had some time to do some thinking which is always nice. Along the way I realized how many For Lease signs I saw.

To be fair, today isn't the first day that I saw a lot of For Lease signs, but it really began to hit home for me. There is a LOT of supply of commercial real estate in the Austin market. A TON! More than I've seen, though I have only been around this market for 3 years. What is even more amazing to me is that people are still BUILDING!

Drive along MoPac, I-35, 183, or any other major throughfare and count the For Lease signs, it truly is amazing. Now what doesnt' jive, is that market rates haven't come down all that much, at least not on the surface. In reality, deals are being done at way below asking rates, but of course nobody aggregates this data, so it is difficult to get a bead on where the market truly is, especially if you don't happen to be a commercial real estate agent actively working in the Austin market. I can tell you for a FACT that rates are way below anything you read in a research report, or see offered by a landlord. If you want proof, call me on my cell at 832.659.5076 and I will prove it to you.

Bottom line - Supply is up, rates are down (remember that microeconmics class you took many years ago that taught you about supply and demand?), supply is only going to grow, and rates are only going to continue to go down (at least in the short-term).

Buls Hodge Consulting is the only firm (that I'm aware of anyway) in the Austin area that is gathering the information on subleases and publishing a report about commercial sublease space. The report is available through our website, and some of the most salient points are posted on our website blog which can be seen here. Check it out and see what you think! Be sure to be on the lookout for the latest sublease statistics this week.

One of the big things that I've been pushing for a couple of years now is a new website. We have gone through a couple of iterations (I think we are on our third) but have now come to a "Final" product. That being said, I think that our team at Buls Hodge has all come to realize that the web is a dynamic place, and there is no truly final website, as it is a living, breathing, and ever-changing thing. In any case, I'd love to hear some feedback if you have a moment to check it out at www.bulshodge.com.

Thanks!

Here in Austin, commercial brokers like to use this e-mail list to broadcast their haves and needs to the brokerage community. I'd say that there are anywhere from 100 - 200 emails sent out every day, so naturally it can be tedious to sort through them all. People send everything from executive suites needed to clients looking for 100,000 SF.

Last week I sent out broadcast for a VERY small deal. 1 - 2 offices for a U.S. Senate candidate, looking for a 6 - 9 month lease. The commission here was hardly worth anything, but it was more a favor than anything else. Imagine my surprise, when on the road to Arkansas (to see my Longhorns lose to the Razorbacks), I had over 30 responses by e-mail or phone. WOW! Landlords are scared, and looking at anything to get more cash-flow. I've talked about this with some other guys, and it is truly a great time to be a tenant looking for space, you can get some really great deals.