Many commercial landlords are battling high vacancy rates by giving heavy concessions to franchises in order to help fill empty retail spaces, the Star-Ledger reports.

"There is no question about it: Coming out of the recession, people are doing a lot more franchise deals," Chuck Lanyard, president of the Goldstein Group brokerage firm, told the paper.

According to the paper, many new commercial tenants are smaller businesses such as restaurants, gyms or tax return franchises - compared to "big box" stores such as Circuit City and Linens 'n Things.

Landlords have even started subdividing bigger spaces that used to house the larger chains into several smaller units to capitalize on the growing trend, which means that smaller-sized chains could dominate the real estate market in the coming years.

Commercial real estate prices are currently nearing historic lows. A recent report by Moody's Investors Service found that commercial property prices had fallen 42 percent compared with October 2007. Office and retail space prices have also plummeted - falling 32 and 28 percent, respectively.




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