Miller Industrial Properties Completes 17 Deals in Q1, 20120

Posted by Thomas Miller, CCIM

Despite the slow market, Miller Industrial Properties completed 17 transactions in Q1,2012.

Miller Industrial Properties
Reno NV Commercial and Industrial Real Estate

The quarter recorded a net increase in vacancy, however, this was more of an accounting result than actual firms leaving the market in Q1, since we recorded earlier departures in this period.

For the Q1 2012, market summary report see http://bit.ly/K8DZKW

Miller Industrial Properties continues our track record of completing a high number of transaction per quarter. This transaction volume not only keeps us abreast of the latest market trades information, but landlords are mindful that when we bring a prospective tenant to their property we get excellent rates and terms for our clients, since landlords know that out firm know to complete transaction.

Miller Industrial Properties is available to assist you with your Industrial / Commercial Real Estate needs. Please contact us at 775-828-4665 (office) or saless@mipnv.com for further information on properties that are currently available.
http://www.millerindustrialproperties.com

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Commercial Real Estate Myths Series: Myth 10

Posted by Thomas Miller, CCIM

Myth #1: “I know how to surf the web for properties; I don’t need a Real Estate Agent.”

Commercial Real Estate Myths Series - Series 1
Commercial Real Estate Myths Series – Series 1 (PDF)

Ok, you have located properties on the web just fine, why do you need the services of a real estate agent?

Knowing how to access commercial real estate sites online does not relieve the need or the advantages of engaging professional real estate representation.

First of all, competent local agents are challenged to locate every potential site for clients using all of their resources…resources which you cannot access.

The likelihood you have located all of your viable options by checking websites is literally zero. Don’t shortchange yourself by looking at less than the entire market by trying to use search results that are likely incomplete and inaccurate.

Chances are that by outlining your company’s current and future needs with a professional industrial agent, will likely result in an adjustment to the type, size and nature of the property you believe you want.

Not to say that you will change from looking for a warehouse and end up in a circus tent…but, you may find other, possibly even better options, than you had initially considered.

Market conditions that might adjust your plans could be:

  • Market over-availability in certain segments
  • Market shortages
  • Special price breaks at certain locations
  • Multi tenant building advantages vs. stand alone building advantages
  • Location

A candid conversation with a real estate professional can yield a wealth of value when embarking on the property search process.

Property location is only one step in the process of securing a building lease (active link on ‘lease’ to the 13 step lease process article) or purchase. A professional real estate broker offers numerous services far beyond just assembling potential properties for viewing.

A top commercial agent knows the local market completely including:

  • where are the best values
  • landlords’ propensities
  • landlord accommodations to certain uses
  • who is the most motivated at this time
  • landlord resources and limitations
  • special lease term availability
  • and much more

In short, the agent becomes your personal guide through a territory you have not traveled before.
Client’s who tackle this on their own, with inexperienced agents or working through their landlord, can spend large amounts of their time with mixed results at best.

A top agent matches you with all potential properties that suit your needs…saving you time and energy looking at misfi t and overpriced and inappropriate properties already in play with another tenant or buyer.

A top agent knows all available properties, not just those that are listed on the web, so you see all possible properties, not just the ones you may have discovered. Agents are also aware of factors affecting property values that you may not be aware of. In short, they put the puzzle together for you quickly and efficiently.

Download Commercial Real Estate Myths Series: Myth 1 (PDF)

Miller Industrial Properties
Miller Industrial Properties offers vital, current market knowledge and objective, informed advice. We become part of your team and streamline the entire process. Our many years of service to relocating and local expansions give us a significant leg up in assisting you through the process. We are in the sole business of industrial real estate, allowing us to be well suited to advocate on your behalf to help secure the best possible lease rate or sales price, with the most favorable terms and conditions

We’ll do the previewing of potential spaces, get the questions answered, accumulate information into easily understood spreadsheets and set up an efficient tour of the appropriate spaces. We can also address other issues like environmental questions, licensing, permitting, incorporating, financing, and all items related to setting up your business. Our experience, knowledge and contacts help get your needs answered as quickly as possible. We know the territory, let us team with your firm and get you to the finish line quickly.

So, enjoy your web-savvy abilities, but don’t fall into the trap of believing that your computer skills translate into industrial real estate expertise that other professionals have developed over a lengthy career or hard work, study and successful transactions.

http://www.MillerIndustrialProperties.com

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13 Commerce Real Estate Solutions Lease Process0

Posted by Thomas Miller, CCIM

The following outline serves to acquaint our clients with the lease process in order to assist the planning phase of your relocation or expansion into the Northern Nevada Market. We have shown the typical steps in the process with a description of the actions that take place in that phase.

  1. Define Needs & Determine Project Scope: through a preliminary dialogue between the agent and client, the process of defining the requirement is refined. Some clients have uncertainty on property sizes or lease term due to expansion potential, unsure sales volume, or other factors. Many times, we can help with a solution to your concerns that you may not be aware of. With decades of solving hundreds of clients needs, it’s likely we have the solution to your every need. The more we know about all of your needs, the better we can serve you. Remember, we are on your side, we’re your partner. We work for you. Tell us what you want, what you don’t, and let us provide solution options.
  2. Review and Presentation of Marketplace opportunities: After the requirement are established, Miller Industrial Properties employs several industrial property databases as well as our in-house database to completely canvass and identify all available locations that could potentially meet your needs. Our list never eliminates any possible location since we always let the client do the eliminating. This assures the client sees all opportunities. The results are then assembled into a proprietary Excel spreadsheet that identifies and recaps all critical property features into an easy to read format that allows quick comparisons site to site.
  3. Select viable site locations – The Tour: When touring multiple industrial properties after a short while they all begin to look alike. We hear this all the time. This is why our property recap spreadsheets are detailed, allowing easy comparison, feature by feature, and include photos. We highly encourage note taking during or immediately after leaving the property. You should find these initial impressions invaluable when the tour completes. Not only will you recall the specific property better, but your intangible, subjective comments help you rank the various options, assisting you in developing your short list. Also, while on tours you are well advised not to engage in conversation with the landlords nor their agents. Our role is to maximize our negotiating leverage. Information obtained about you, your company, or even simple comments about the property, either positive or negative are better shared with the agent working solely on your behalf.
  4. Property Selection – Initial Short List: While visiting the property, we recommend that you ask yourself if each property COULD serve your needs. Eliminate those that will not work, and keep all others. This is the first cut you want to make. Then you can order rank all acceptable properties by the features most important to you and your intangibles. Taking these steps helps organize your selection process.
  5. Refining the Short List: Based on how properties accommodate your specifi c needs, we order rank the initial list, ending up with some sites rising to the top. We suggest to always try to find at least three sites that you fi nd acceptable. You may have a clear favorite, but try to have three sites in your final short list. Final pricing may make a second or third ranked property the best overall choice.
  6. RFP Process or Make an offer: In the RFP phase, we gather all of your project requirements (lease term, expansion needs, options to renew, building modifications, tenant improvements, etc.) plus other aspects and assemble a packet that discloses your identity, your anticipated use, possibly financial data, and presents this to the property ownership. We will be requesting a proposal that addresses quoted lease rates, NNN charges, and a myriad of terms, relevant to assess the properties suitability as your new location. Miller Industrial Properties will gather the replies, check them for completeness and accuracy, and insert the data into a spreadsheet that assists your easy analysis of the property options. This financial analysis, along with your subjective and objective order ranking of the sites, should yield a best option. On occasion, two properties will equally be “best choices” in which case the marketplace puts you in a good position, should final lease negotiations get derailed for some reason.
  7. When Does the Negotiation Stop?: Obviously, when the client feels it has. However, our experience has been that the RFP process yields very competitive numbers, first time around. Landlords know their properties will be ranked mostly by price at this stage of the process, so pricing is very competitive. We have also experienced some success when we commit to accept a lease proposal, but at a slightly lower price or diff erent term. We emphasize “offer to accept the property” as the key element at this phase if further pricing accommodations are requested. Feel free to inquire about this directly with your Miller Industrial Properties agent.
  8. Approve transaction points: At this stage, the client signs off on the business steps of the transaction and proceeds to the next steps.
  9. Lease review – Final contract form: The lease review process is commonly assisted by or even totally conducted by your legal counsel, if you plan to use legal counsel, it is important to team with an attorney that has experience reviewing the type of lease document that you are presented with. Our experience is that the lease review process using leases from REITs tends to be facilitated using an attorney with experience with those type of lease documents, due to the documents depth of matters addressed and the unique concerns of REITs required by their organizational charters. As always, adequate time should be allotted for the review process, mindful of other matters challenge for the time of a busy attorney. Note that we have not included a Letter of Intent step. While there are occasional uses for an LOI; we find that a properly written and negotiated LOI should include such a degree of items to adequately protect our clients, that we are effectively pre-negotiating most all of the substantive lease points in advance, having to negotiate all of those points all over again in the lease itself. We regard LOI’s at this stage as actually wasting precious time, effort and expense for the client.
  10. When do you ‘Have a deal’? You have secured a deal when a lease is signed by both parties and delivered; NOT before. It is important that the prospective tenant clearly understand that all of the activity prior to and leading up to a fully signed lease document, does not secure property, nor remove it from the market. Most landlords will advise us that there is a lease document out for signature or another deal pending or other interested parties, but landlords never stop marketing their property until a lease is signed. In fact having subsequent activity or possibly even another offer may well affect landlord negotiating stance on the current transaction. Further, if a higher priced, better termed or more substantial credit off er be presented during lease negotiations, many landlords may well actively move forward with those transactions in deference to yours, attempting to locate a substitute property for your use. In the Northern Nevada Industrial Real Estate market, there is a professional courtesy extended to the brokers who have excellent relationships with the landlords, where we will get a heads up from a landlord that a situation may be unfolding where our clients might lose their selected property due to another transaction and we do get these alerts. The conclusion and word to the wise is to keep the process moving ahead with all due haste until it is complete, since time is of the essence.
  11. Sign Lease / Insurance certs. Pay Rent & deposit: Generally, as soon as these items are in the hands of the landlord, they can grant the tenant access to the space, pending the status of required tenant improvements.
  12. Tenant Improvements: If substantial tenant improvements are part of the transaction, time should be scheduled for these to be completed. Generally, most ‘TI’s’ will need a design / approval phase, permitting and field construction. There are methods to significantly shorten the time for this phase; talk to your MIP agent about this.
  13. Post lease Start Up / Occupancy: Our company has been serving the warehouse/distribution/ manufacturing industry in Northern Nevada since 1976, as an industrial property builder and providing real estate advisory services. After the lease, we are an excellent source to help streamline your start up process by recommending high quality, value price contractors, vendors and service providers. We can also assist in the permitting process. Just ask.

Summary: The lease process is one we are well familiar with. Our experience and expertise can streamline this process significantly. In fact, we can complete the process very quickly if the tenant, landlord, and agents all pull together and focus on the steps. However, these are steps that yield the best results for our clients, which we have outlined here, and it does take some amount of time. Please plan accordingly.

We hope this outline serves to help your planning for your new location. Miller Industrial Properties stands ready to help you achieve your goals.

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.

Reno Commercial Real Estate Apparel0

Posted by Thomas Miller, CCIM

Miller Industrial Properties Logo Apparel Catalog

Miller Industrial Properties 2011 Apparel Catalog

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About Miller Industrial Properties

Specializing in commercial real estate in Reno, Nevada, as well as warehouse and manufacturing properties, covering the entire Northern Nevada area. Miller Industrial Properties has been involved with expanding and relocating firms since the 1970’s with industrial, commercial real estate, warehouse and manufacturing property needs. Reno offers vast opportunities in commercial, industrial real estate and vacant land. http://www.MillerIndustrialProperties.com

 

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10 Greg St, Sparks NV0

Posted by Thomas Miller, CCIM

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Guest Post – Spring 2008 Market Conditions – by Phil Mahony2

Posted by Thomas Miller, CCIM

phil8646ab.jpgI have to say honestly – as I always do – that this sub-prime problem is obviously bigger than I anticipated.  The amount of leverage in “hedge” funds and many of the big banks has caused some serious dislocations.  We have had bad actors – some secondary mortgage companies that have not allowed folks to refinance their first mortgages, primary dealers that have backed away from supporting auction rate securities markets, predatory lenders, etc.  The scope of this problem also caught the Treasury and the Federal Reserve (Fed) by surprise, but they are catching up fast.  The Fed has cut rates sharply and will likely cut them again.  They have also injected more than $60 billion into the banking system and announced that they are expanding that program by another $100 billion this month.  Washington has moved quickly with the short-term fiscal stimulus package.  Many of you should be seeing tax rebate checks by May.

All this turmoil in credit markets, continued increases in oil prices and the psychological impact of the scary headlines has slowed the economy.  Real GDP rose 3.8% and 4.9% in the second and third quarters of last year, but was up only 0.6% in the fourth.  Last Friday, 3-7-08,  we got an employment report that showed a 63,000 decline in payroll employment in February, following a 22,000 decline in January.  At this point it looks as though GDP growth will be in the +0.5% to -0.5% range in the first quarter, with another round of credit turmoil, housing declines and sky-high oil prices placing a big burden on the economy.  My two biggest concerns have worsened – oil prices are still rising, and the dollar exchange rate continues to fall.  In both these areas I think government policy has been poor.  So, while I still think we will avoid recession, the odds are rising.

However, it is important to maintain perspective.  Last week, the Fed released data for the nation’s balance sheet for the fourth quarter.  While this vast compendium of data shows trouble in banks, it also shows great areas of strength.  U.S. household net worth dropped $533 billion in the quarter, but still shows a rise of $1.9 trillion over the last four quarters to a whopping $57.7 trillion.  U.S. non-financial corporations increased net worth by $1.8 trillion over 2007 to $16.1 trillion at year end.  At that point their net worth was 33% above their aggregate equity market value, and their debt to net worth ratio fell to a 22 year low.  Finally, when you hear people throwing around big hypothetical numbers like “$500 billion in bank write-downs”, remember that $500 billion amounts to 3% of the $15.8 trillion in financial sector debt.

In times like this, investment decision making gets tough and time horizons shrink.  While I cannot say whether this market turmoil will be long-lived or not, I do believe that the actions being taken by the Fed will turn things around.  I think selling out of some equity sectors that have been, in my opinion indiscriminately hit (technology, healthcare and exporting industrials), or going to cash would likely be a mistake.   As always, please call me at 775-850-2500 with any questions or concerns.

Phil

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Financial Instability and The Investment Real Estate market0

Posted by Thomas Miller, CCIM

Recent news articles and reports from national publications have noted the effects of our national financial insecurity on the real estate investment market. This is my accumulated take on these reports.

It seems that as 2007 closed out, pretty much everyone has come to accept that the huge sub prime lending market issue and the housing market that continues to slow with deflating values has caused a definable overall slowing to almost every aspect of the economy.

Locally, the industrial real estate market reached its peak in late 2006 and has slacked off since. The natural timelag between actual market conditions and new inventory coming on line is leaving develoeprs with unoccupied product with more still coming on line in 2008 to further dillute an already overbuilt market in specific submarkets locally. These conditions are not unusual to the national market as well. Therefore, real estate developers and investors are adjusting.

Despite this, most reports continue to indicate relatively solid economic factors. In addition, the weak dollar has strengthened exports and the domino effect rom those added foreign orders in U.S. products. The industrial market, while definately slowed should continue to see an amount of growth.

Also, with the slowing of the absorption rates in industrial, availability is up and landlord concessions are increasing, further encouraging firms that have been on the fence to step up and proceed with their expansions in some cases. This all lends a degree of interest in the Industrial investmsnet market.

Real Estate investment Cap Rates have all fallen in the past 4 years. There have been an abundance of investmenbt dollars chasing less than abunmdant invetsment portfolios. Retail Cap rates were the sweetheat in the 2005 era with rates approaching 15%, while the other catagories were in the 3-4% range. Now however, retail Cap Rates have fallen into the gutter of teh group at 4-5%, while Office is now leading the group at over 12%. Industrial is next at about 8% nationally. Although properties seem to be trading slightly lower than that locally at about 7.25%.

So while the uncertainty continues in the Capital markets along with low interest rates, all favor investment in commercial real estate, relativew to other options. The stepped up conservatism in the lending market may well push more investemnt into existing properties, further stabalizing Cap Rates.

And to quote a recent report “Commercial Real Estate has seen nothing but upside volitility for the past four years, and although it now is facing challanges, this asset class should hold its ownas an investment alternative on a relative basis.”

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.

Northern Nevada Industrial Market: A softening market in 20070

Posted by Thomas Miller, CCIM

The Industrial real estate market in Northern Nevada is experiencing a cooling. This trend started in the earlier quarters of the year and has continued through this fall. The year started with a low vacancy rate; about 5%. By year end, we expect to be at about a 10% vacancy. Market balance, adequate inventory for current demand is generally considered to be about 7-8%, with our market’s typical activity. This shift has occured due to two significant factors; unprecendented new, speculative construction coupled with a cooling of absorption by tenants. It seems like the broadly depressed housing market has indeed cooled the entire economy enough to have a ripple effect on manufracturers and distributers that would have typically leased the new inventory. 2007 has racked up about half of net absorption that we did in 2006. So there we have it, lots of new buildings and less new tenants to lease them. Supply is up, demand is down and simple economics dictates, right ? Well, not so fast.

Yes, overall the basic laws of economics do effect markets of course, but a deeper understanding of our market is needed. The Northern Nevada industrial real estate market is made up of approximately 67,000,000 sf of industrial property, both leased and owned. The great majority is leased. Of that the great majority of the leased property is owned by large, corporate real estate investing groups. Many of these operate diversified eal estate portfolios, with a widespread geographic basis. Some even internationally. These corporations tend to hold properties for long term and are no strangers to market downturns. It’s built into the overall portfolio performance to hold vacant space until market conditions turn around, rather to dump it at well below market rates. While a smaller private investor needs to lease his space to get an income stream going for fear of losing his property, these large corporations can be far more patient and wait for things to come back.

However, even tho many landlords are not anxious to lease space at extremely low rates, there definately are signs of landlord concessions on pricing and terms that are cropping up on deals going on in the market today that would not have been viable a year ago. Tenants, especially in specific size ranges which are currently overbuilt, are experiencing first year rates that have relaxed and lease terms that are more favorable. Landlords are becoming more aggressive to get tenants into their vacant properties.

This shift to a better ‘buyers’ market serves the saavy tenant well if he can play his cards right at this time. There are a number of things tenats can do at this time to take advantage of this market. And we wiill explaore these in my next Blog.

Thanks for reading and your comments are welcome.

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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