An Industrial Real Estate Experiment
Today, I put myself into the position of a layman searching for an industrial warehouse in northern Nevada. I looked up two of the most commonly known commercial real estate sites and searched for a 20-25,000 sf warehouse in Reno, Nevada. The search results from the two sites were similar. Eleven locations were listed.
So a businessman may assume he was ready to visit Reno, select one of the several locations and plan his move. Simple enough, no? First, let’s take a closer look at these findings. As a broker here in town, I’m privy to details about these properties that aren’t necessarily advertised online.
- Site 1: I know that front half of this site has a lease out for signature. The remainder is too small, with a very congested dock. Scratch this one.
- Site 2: Leased but still on the internet. Scratch this one.
- Site 3: Available but has almost no office and an office buildout will take about 16 weeks and may well impact the attractive quoted price. Status is unknown.
- Site 4: Moderate location and still available, but this location flooded deeply in 1997 and has almost flooded again twice since then. Will the landlord’s agent tell you these facts ? Probably not.
- Site #5: A few doors down from site #4, and the same situation applies in both locations.
- Site #6: Has a tentative lease out for signature now.
By now, you surely get the point. If being successful at industrial real estate was as simple as running a few web searches, putting the results on paper and sending to a prospect then, no, you would not need a real estate agent.
Those eleven potential locations actually boiled down to four options – three older class B locations and one very old class C location that’s functionally obsolete for modern logistical operations. Of the three remaining locations, two are with new portfolio ownerships that are driven to escalate rents, minimize any new tenant concessions and offer few if any tenant improvement funds.
Now, if your initial web search indicated all of this, would you be so fast to book your airfare and hotel?
And here’s another thing your web research wouldn’t turn up – our office also is aware of two or three other locations that aren’t yet listed online. Two are new to the market and not advertised yet and one is a property in which the owner will subdivide a larger space, but the property search isn’t logged into the search service to show this availability.
Are you beginning to see the value of bringing in an experienced agent to help you sort out your options?
Added Benefits of an Agent
Here’s another valuable perk your agent will incorporate into the property search and tour/selection process – not all property ownership managers have the same goals. Some are looking for high credit tenants, others are looking for high rents, others longer term deals. Others are looking for specific combinations of these items. Your agent should know all of this and that only helps direct you to the proper fit faster, saving you time and wasted effort.
After the right locations are vetted, your agent assists with suggestions on an appropriate offer, how much you can or can’t ask for and other specific points. Leasing an older property? Who pays if the expensive HVAC unit breaks? Your agent is thinking about these things.
The points I have touched upon here are items for which technology has not yet found an acceptable substitute. Thankfully, your industrial real estate agent is considering them – and more.