The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

BAY Street landlords had to discount rental rates by one-third at the recession’s height to attract new tenants, a leading realtor telling Tribune Business the market had since “pretty much stabilised”.

David Morley, principal at Morley Realty, said lease/rental rates in the downtown Nassau area were relatively flat. He added that property values were harder to assess due to the absence of major purchases, the last one being the Dart Group’s “premium dollar” acqusition on the corner of Bay and Parliament Streets.

“In terms of rental rates they’ve been relatively flat, if not, at least prior to a couple of months ago, rental values had declined slightly,” Mr Morley told Tribune Business.

While many lease agreements signed three-five years ago had annual rental increases built in, it was a different matter once the recession kicked in, and Bay Street landlords found it difficult to fill vacant space.

“If you had space vacant and were looking for a third party tenant, the rental rates were discounted by one-third - two-thirds of what neighbouring tenants, under existing leases, were paying,” Mr Morley told Tribune Business.

He added that because of the market and wider economic conditions, landlords were faced with “a juggling act” - avoiding huge amounts of vacant space, as this would give the impression of an uncompetitive commercial property, but not ‘giving away’ leases or raising rates so high that they lost existing clients.

Mr Morley said that for the past three years, his advice to commercial clients had been “tenant retention, keep them in, work with those in difficulty”.

“I would like to believe rentals are pretty much stable. I don’t see how they would have increased,” Mr Morley said. “I would like to believe things are going to get better and rebound.”

He contrasted Bay Street, whose rental client base was aimed chiefly at the international market and the cruise ships, with the Southwest Shopping Plaza on Carmichael Road. Morley Realty was the agent for filling that development, and Mr Morley described it as “a totally different market and totally different ball game”, with its location and shopping centre characteristics able to attract numerous businesses in the Mall at Marathon.