By: Jason Kruse, CCIM, Managing Broker, The Colorado Group, Inc. 

It doesn’t take the artistic prowess of painting the Mona Lisa or the literary genius to craft a John Grisham mystery to excel in commercial real estate. Brokers, landlords, and sellers who creatively structure transactions or enhance properties are finding success in today’s competitive market. Creativity manifests in several ways, and understanding these strategies is key to thriving in the current environment.

Reinventing Spaces to Attract Tenants

The abundance of vacant commercial space has pushed landlords to rethink and revamp their properties. Buildings that stand out offer more than just square footage; they deliver experiences through amenities. For instance, converting mundane lobbies into inviting spaces with co-working hubs or lounge areas, can transform a property’s image. Adding full-service common kitchens, high-tech conference rooms, fitness centers, and even onsite coffee shops demonstrates how landlords strive to create a unique selling point.

Energy efficiency has become another crucial factor as tenants seek to lower their occupancy costs. Beyond standard improvements like LED lighting, many landlords are investing in solar panels, energy-efficient HVAC systems, and even advanced communication technology. Installing electric vehicle charging stations is a sustainability move and a value-add that aligns with the growing demand for environmentally conscious choices. Properties equipped with these features appeal to both tenants and buyers, offering long-term savings and convenience.

Flexibility in Deals and Structures

On the financial side, landlords and sellers are getting creative with deal structures to secure leases and sales. Seller-carry financing, for example, has become increasingly popular, offering buyers alternative avenues to secure properties with better terms. These arrangements, which were less common a few years ago, are reviving stalled transactions in today’s economic landscape.

Landlords are also exploring innovative rent schedules. One recent deal involved a 6,000-square-foot office lease where the tenant was charged for 4,000 square feet in year one, 5,000 square feet in year two, and 6,000 square feet for the balance of the lease term. This staggered approach made it easier for the tenant to commit to a larger space while minimizing upfront costs, ultimately benefiting both parties.

Another successful tactic is adapting office layouts to meet post-pandemic needs. Spaces now include flexible workstations, high-speed internet connectivity, and improved air filtration systems. These upgrades cater to hybrid work models, emphasizing collaboration and comfort while maintaining the capability for remote operations. Spaces that fail to keep up with these demands, even with below-market rents, are struggling to lease.

Adapting to Smaller Spaces and Changing Needs

The demand for smaller, more efficient spaces has led landlords to divide larger properties into multiple units. While reconfiguring a 6,000-square-foot property into spaces for four tenants may involve compliance with code requirements, new or updated access points, and additional costs, these investments can pay off quickly. Tenants seeking smaller footprints are less inclined to compromise, so offering move-in-ready spaces tailored to their needs makes all the difference.

Medical office spaces are also faring well, particularly clinics that cater to outpatient or specialized services. These require unique designs, such as upgraded plumbing, improved ventilation, and patient-friendly layouts, but the payoff is reliable long-term tenants in a stable sector.

Boulder Real Estate Snapshot

• Over 150 office spaces in Boulder are available in the 2,000—to 4,000-square-foot range, contributing to a vacancy rate exceeding 20%.
• Last year, in Boulder there were 48 office, industrial, and retail properties sold, totaling nearly $80 million.
• There are currently 12 listed properties for sale in Bouder county with an asking price in excess of $7,000,000.

*Source: CoStar

By adapting to trends, investing in updates, and offering flexible, innovative solutions, brokers, landlords, and sellers continue overcoming market challenges and closing deals. Whether it’s energy-efficient upgrades, smaller units, or creative financial terms, success lies in thinking outside the box.