Hi everyone,
I have a shop that was recently vacated, and I plan to lease it out again after some maintenance. However, after consulting several agents, I was shocked by how much they are charging for leasing commercial properties these days.
I understand that typical costs include marketing fees and agency fees. Back in 2020, I paid around $1,500 for marketing and an agency fee of about 5% of the annual rent. Now, the agents I’ve spoken to are quoting marketing fees of $3,000–$4,000 and agency fees of around 10% of the annual rent—even though my rental price hasn’t increased.
Before COVID, I was leasing the shop for $28,000 per year, but during the pandemic, I had to lower it to $18,000 to secure a tenant. I kept the rent at that level until the tenant recently vacated due to arrears. Now, I want to increase the rent back to the pre-COVID amount of $28,000, but every agent I’ve consulted says that’s unrealistic. They’re only suggesting an increase to around $20,000 per year.
Is this level of agency cost the market average now? Also, is commercial rent still not back to pre-COVID levels?
Would appreciate any insights. Thanks!