Heartland Real Estate Business Question of the Month

From ‘Heartland Real Estate Business August 2025’ – Heartland Real Estate Business

Question of the Month: What trendlines are you seeing today from your office occupier clients?

Hiffman Executive Vice President, Office Services – Aubrey Englund

“Lease negotiations have become increasingly complex, primarily due to rising construction costs. Deals are rarely cut and dry, and it now takes a high level of creativity and collaboration between tenants and landlords to get transactions across the finish line.

While many companies still prioritize modernized office space, escalating construction costs continue to pose challenges. In addition to the cost increases we’ve seen in recent years, we’re now seeing tariffs being factored into construction budgets. To protect against these unpredictable variables, construction and furniture vendors are raising contingency fees or adding “below-the-line” charges specifically tied to tariff-related expenses.

One common strategy to offset rising costs is negotiating the flexibility to convert rent abatement into additional construction allowance. As tenant rep brokers, we work diligently to ensure our clients secure the most favorable terms while minimizing out-of-pocket costs. That often includes identifying spaces with reusable existing conditions in buildings backed by motivated, well-capitalized landlords.”

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About NAI Hiffman:

NAI Hiffman is one of the largest independent commercial real estate services firms in the US, with a primary focus on metropolitan Chicago, and part of the NAI Global network. We provide institutional and private leasing, tenant representation, capital markets, project services, research, and marketing services for owners and occupiers of commercial real estate. To meet our clients’ growing needs outside of our exclusive NAI Hiffman territory, we launched Hiffman National, our dedicated property management division, which provides facility management, accounting, lease administration, lender services and project services across the country. NAI Hiffman | Hiffman National is an award winning company headquartered in suburban Chicago, with more than 275 employees strategically located throughout North America.

About Hiffman National:

Hiffman National is one of the US’s largest independent commercial real estate property management firms, providing institutional and private clients exceptional customized solutions for property management, project management, property accounting, lease administration, marketing, and research. The firm’s comprehensive property management platform and attentive approach to service contribute to successful life-long relationships and client satisfaction. As a nationally bestowed Top Workplace, and recognized CRE award winner, Hiffman National is headquartered in suburban Chicago, with more than 275 employees nationally and an additional six hub locations and 25 satellite offices across North America.