By James A. Schnur, CCIM
President and Designated Managing Broker
Integrated Real Estate Solutions
Industrial space is in high demand in many areas around the country. With the increased competition for available space, you need to be ready to make a quick decision when you find the perfect property.
Quick doesn’t mean make a hasty decision. That leads to relocation remorse—the regret and frustration you experience when you choose a site without asking the right questions. The result is committing to an office or industrial space that doesn’t fulfill your needs. You discover the desired labor pool requires public transportation, for example, but you failed to consider that factor. The weight of your warehouse or manufacturing equipment exceeds the floor loading maximum or the floor is not flat enough. Sometimes, it can be as simple as insufficiencies in parking, power, and Internet access. Or maybe you assumed you could build a fence around the area, but discovered too late that it was prohibited.
Assumptions, guesses, and estimations contribute to a bad decision when choosing the space to relocate your business. Get yourself prepared by better understanding your needs. Engage a good commercial real estate broker—a professional who is in the business of understanding the intricacies of matching a company to the office space, manufacturing facilities, or distribution center. Your broker will guide you to a commercial real estate transaction that leaves you feeling like you got the site with the best value for you—location, amenities, and price.
A broker’s job is to understand what you need and then find the right match. This partner knows how to find properties, evaluate them (and the location) to meet your business needs, and assess the pros and cons. A good broker will not waste your time with “almost” choices. Your relocation should not involve a major compromise that affects your business operations. Prepare the “Must Have” list with your broker, and stick with it as closely as the market allows.
The team strategy
In addition to the commercial real estate broker, you will benefit from the services of an architect and/or space planner. These professionals can lend their insight and talents to probe more deeply into how you are going to use your space so that you can better define the interior space and access to it. For example, how many employees do you expect to have and how do you plan to situate them? Your answer should reflect your current situation and a minimum of five years into the future. Moving is a hassle for anyone, but the business disruption that can be caused for a move can be far more costly—another critical reason to invest in engaging professionals to assist in making the right decision now.
Your architect and space planner will focus on the interior details, current and future, and that information transfers to your broker—the person in charge of finding the location and property and ensuring its features match your criteria. This broker then negotiates the terms ensure you receive everything you need. For example, if you want renovations done or the ability to expand specify them in the lease contract. Your landlord will be more accommodating during negotiation than after the agreement is signed.
I’ve had people ask if they really need to invest in these professional resources. I respond by asking them to consider the cost of NOT doing so. Could you overlook some aspect of your business’s space needs that could present a problem? What if you under-estimate your growth or the amount of warehouse space you’ll need? Today’s warehouses are facing a rapid proliferation of SKUs that require more space and, in turn, more staff and perhaps automation.
Not long ago, I worked with a company that was planning to establish a call center in another state, where the labor was more affordable than in the headquarters’ metropolitan locale. The client originally said, “Just get me some space.” It’s not that simple when you do it right.
We worked with the company’s relocation manager to determine how many people would be working at the call center at any given time, to calculate both the interior and parking space to comfortably accommodate the staff. Because public transportation wasn’t an option in the chosen area, we had to allow for ample parking for a full shift. We also looked at the electrical and HVAC requirements for the building, because a call center’s computers, phones, lighting, and high people density place heavy demand on electricity and HVAC. We initially found 13 properties that matched our “Must Have” list. After visiting each, we narrowed the list to 6, and the company was able to choose one that provided the ideal match for their needs.
Is enough space really “enough”?
How much space do you need for your company? This isn’t a simple question. You’ll need to delve into your operation to clearly understand what it takes to house your business and enable an efficient flow of workers and processes. Your commercial real estate broker will help you identify the criteria by asking a lot of questions, touring your current location, and then asking more questions.
This effort contributes to avoiding the unfortunate case of relocation remorse, a miserable condition that can last a long time.
Integrated Real Estate Solutions, Inc. provides clients with the in-depth knowledge and experience that is critical to determine the right path to your next move, lease renewal, or strategic repositioning of your real estate portfolio. Contact us or call 847.550.0160 today about your needs, and put our success to work for you.