Building to Suit in Northern Nevada? Read This First.0

Posted by Thomas Miller, CCIM

miller-industrial-properties-building-to-suit-strategies-for-success

With a rebounding economy comes a shortage of locations for new business. It makes sense then, for businesses to consider the wisdom and value of building to suit. We discussed the value of a design-build manager in a previous post, and now we’ve created a download intended to educate those investigating build-to-suit projects. … Read more →

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Dare We Say It? Northern Nevada’s Industrial Real Estate Market Turns the Corner0

Posted by Thomas Miller, CCIM

Northern Nevada’s Industrial Real Estate Market Turns the Corner

Since 2008, we have heard positive economic predictions that have flopped time and time again. The fallout of those sadly mistaken forecasts was that over the past few years, no one dared to make any “We’ve turned the corner!” predictions. Until now, that is, because northern Nevada’s industrial real estate market really has! Onto the proof:

  • Through 2013, we have had excellent market activity approaching record absorption rates. Certain market size segments are all but unavailable, with only two locations remaining for 200,000 sf and up, and nothing available for 400,000 sf and up. The ‘big box’ market segment has already experienced raising rents in the 15% range due to the final few transactions realizing supply/demand economics. Furthermore, next quarter has already logged in some substantial deals and we are looking for a sixth consecutive quarter of decreasing vacancy.
  • Another factor is that in previous quarters, positive absorptions were balanced by firms downsizing or moving out of the market. This had the effect of keeping the area’s net absorption rate modest, maintaining overall vacancy high and keeping rents low. The recent strong net absorptions are signs that overall economic recovery is gaining footing.
  • Another observation is the return of the midsized transaction, defined as the 30,000 to 60,000 sf sized user. I characterize these firms as the small to midsized firms with a base operation on the East Coast or in the Midwest. These firms have been servicing their West Coast clients via truck freight. Now we are seeing these firms coming back into the market to build their Western presence, cut freight costs and improve delivery times to their eleven Western state customers. I view it as a very positive sign that these smaller firms feel confident enough with their mid and long range business models to use resources to expand in this way.  

The year is shaping up to the point that it should become the one we can point to and say, “After seeing the all-time market lows, 2013 saw the beginning stages of recovery in this economic cycle.” If the current trends continue, we should be seeing new industrial real estate ‘big box’ products built on speculation by early 2014. Rents should be able to bridge the gap to allow a reasonable return on investment, and we will be moving ahead to a balanced market where landlords are no longer required to be the last man standing to secure a lease transaction. And because all boats rise together on the tide, that’s the type of market that will benefit both landlords and tenants alike.

Our posts are intended to educate commercial real estate users so they can make better decisions in their real estate use, investments, buying and selling. We encourage your input and commentary. If you are enjoying these posts and finding them useful, help spread the word via Facebook, Twitter, LinkedIn, Google + or email with the buttons above.

Q1 2013 Northern Nevada Industrial Market Status and Forecast0

Posted by Thomas Miller, CCIM

What’s Hot for Northern Nevada’s Industrial Market Status for Q1 2013:

  • Market Activity Strong
  • Continued Declining Vacancy Anticipated
  • Pricing Remains a Bargain
  • Economy Continuing to Post Some Positive Signs
Download the Miller Industrial Properties Q1

Miller Industrial Properties Q1 2013 Market Report

 

Our posts are intended to educate commercial real estate users so they can make better decisions in their real estate use, investments, buying and selling. We encourage your input and commentary. If you are enjoying these posts and finding them useful, help spread the word via Facebook, Twitter, LinkedIn, Google + or email with the buttons above.

2012 Year End Report – Reno, Nv Industrial Real Estate Market0

Posted by Thomas Miller, CCIM

Industrial Real Estate and Q4 2012 Market Report

All considered, the Reno Metro Industrial real estate market did ‘ok’ in 2012. Certainly nowhere near the red hot Inland Empire’s wild influx of new occupancy, but far better than Las Vegas’s overall negative net absorption for their 2012.  Overall vacancy dropped almost 2% (from 15.2% to 13.4%) in 2012, resulting from a series of up and down quarters. There were a nice group of larger transactions in the year and a nicer group of sales, with opportunistic tenants and buyers alike snapping up incredible deals, leasing at rates not seen in a decade and buying at significantly lower than building costs.

2012, Q4 saw a large lease transaction with Bizchair ( eRetailer from Atlanta) completing the 100% lease up of Panattoni’s Lear Industrial, 4 building Complex in Stead with 292,500sf. Previously, PPG leased Kennedy’s big box in TRIC for 187ksf, Alfa Aesar leased Prologis’s 110ksf free standing property off Vista in Sparks,  Sierra Converting leaving their long term tenancy with Prologis and buying the ex-Quad Graphics building in Stead at 181ksf and Torchmate’s lease of 118ksf. Also CRown Beverage bought the ex-Weyerhaeuser 72,500sf property at 600 Spice in Sparks, Agru America expanded and bought Polypipe’s plastics extrusion facility in Fernley. Building sales continue to be the bargains of the decade. Market velocity, which certainly had both higher and lower trending, did continue to march ahead with fewer and fewer losses of firms leaving the area as the year progressed. As has been the case for quite some time now, land sales are almost nil as well as new construction.

The outlook for 2013 starts out similar to 2012. Rather luke warm. There are potential transactions still circling the market. It does seem that there is a resurgence in the midsized lease users (35-75,000 sf), which has been the dead zone in the market for quite some time.  I attribute that size occupant to the typical manufacturer or distributor taking a modest step into the western market service area. This has obviously been an industry sector (small business) that has experienced hard times the past 3-4 years. It is encouraging to see this activity, lets hope it continues.

The big box inventory is evaporating and I expect to experience shortages in this availability size in 2013as the few remaining sites are taken down. New, speculative building still is not on the radar, but sooner or later the first one out of the box with new product will be the recipient of much attention. I would expect the carry time on any new product to be well less than experienced in the 2007-2010 era. It is yet to be seen what rental rates any new inventory will achieve. 2013 should be interesting.          

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Selling – is it Evil?0

Posted by Thomas Miller, CCIM

I saw this title in a magazine article recently. Rather than read the article, I Selling - is it Evilthought about the perceptions out there that could characterize the sales process as “Evil.” If your experiences with sales revolve around the pushy car salesmen, late night infomercials about ladders that turn into transformers, or the faces at your door expounding the virtues of joining their religion, then you may tend to vote in the affirmative. If you get no value from the experience, then it’s only natural that you feel pestered, pressured, and uncomfortable throughout any form of a sales process.

Now, having given the adjective ‘Evil’ some credence, are there any arguments supporting selling? Of course, but I feel that it all revolves around the salesmanship of the process. By that I mean: what is truly running through the mind of the sales professional? There are too many different ideas of the right mindset to catalogue, but we should remember that the customer always knows when he is being ‘sold’ something, and when he’s being counseled.

Most true front line salesmen make their living through straight commissioned fees based on closed sales. By its nature, this format tends to add pressure to the sale process, and many times results in the prospect feeling he is ‘being sold’. How does this common car lot question make you feel: “Say Tom (because they always like to sound so friendly), if we find the right car at the right price today, will you buy it?” It’s a given that if you’re at the dealership you’re probably interested in buying a car, but when this is one of the first questions asked, you probably feel as though the lid has just sealed you in, and the pressure cooker is turning on.

The fault here, and why it leads to the perception that selling is evil, is because questions like this tend to happen before the salesman ever inquires about you, your situation, your reason for being here, your timing, and your needs. Not only is his need to close the sale more important than satisfying your needs, it’s more important than his even learning what your needs are.

Whenever this happens to me, I know I’m dealing with a rookie salesman, and one who is probably desperate, as well. My stay at that car lot won’t be very long, and I’m already mentally gone, and thinking about where else I can go.

I can’t recall when I personally made the shift from this approach to the more consultative attitude I take today, but it’s been quite a while. It was a big shift in my mindset, and it has affected every aspect of my sales process, as well as the quality of my client relationships.

By counseling my prospective clients, I try to position myself as a valued member of their management team – one who just so happens to have all the professional skill and local knowledge necessary to the task. However, that isn’t enough. There is one critical element missing: knowledge of their business, and their goals. The Internet is invaluable for learning about an industry, a business within that industry, and even the individuals within that company; but the awareness of the client’s goals comes through building trust, otherwise the client may never share their goals and needs. To me, that is the key of the sales process: building trust. This is where a true sales professional earns his stripes, and brings value to the prospective client — and it all comes from choosing a consultative strategy, not a selling tactic.

If a sales professional can determine the client’s actual needs, and then direct the client to the very best solution for the client, then significant value has been injected into the process. And guess what? Sometimes the best solution for the client isn’t yours.

Selling is it evil?

Is this a potential conflict with the commissioned sales fee structure? Sometimes, yes, but think of how the client feels when they initially asked for something they thought they needed, and the sales professional showed them a much better solution at a much better price! Immediate trust. And who knows, maybe the client still buys the initial solution because of some other factor, but one thing is for sure — that salesman just made a very positive impression, and referrals and future business should follow.

My conviction is that customers always know when a salesman is taking that rare approach of consulting with them based on their needs, and really listening to them, and that the trust-based relationship that results should be the true goal – not the immediate sale. Make it a conversation from one businessman to another, and then the concept of the “evil salesman” won’t enter their mind.

Download the PDF

Our posts are intended to educate commercial real estate users so they can make better decisions in their real estate use, investments, buying and selling. We encourage your input and commentary. If you are enjoying these posts and finding them useful, help spread the word via Facebook, Twitter, LinkedIn, Google + or email with the buttons above.

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