In my previous article this month, I made the case that commercial real estate is a far more specialized profession than most people realize. When it comes to choosing commercial property, buildings and locations, there are so many variables to consider that only an expert with many years of experience is truly qualified to guide the search, analysis and valuation processes. As a reminder, here’s a quick clue:
If you are telling your agent what you want and need and then your agent is reacting to your requests – go find a different agent. Your commercial real estate agent or broker should start by asking you a plethora of questions about your business, your intentions, your goals, your operations and many other critical topics that will drive the search and selection steps. Based on the answers to those questions, along with a massive amount of research and analysis, your agent should then be proactively telling you what you want and need and explaining all the reasons why.
To demonstrate how robust and detailed a proper search analysis can and should be, let’s focus specifically on the industrial field and review just some of the questions that need to be answered before shopping properties – and certainly before making any final decisions.
So, let’s pretend I have a client who owns an industrial business, and he is looking for a property that includes a pre-existing building in which he can conduct his business. The following is just a sampling of factors to consider.
Some are more obvious, such as:
- Will the building be used for manufacturing, storage or some combination of both?
- What does the business do, produce or offer?
- How much of it will be produced?
- What type, size and quantity of machines and equipment are needed to produce it?
- What does the production process entail?
- Based on experience (if any), how much space will be required and how will the spaces need to be divided and situated for various operational functions?
Other factors are less obvious but equally as important for finding the right property, such as:
- How do materials and products come and go (shipping and receiving details)?
- How many and what size loading docks will be required – and is there plenty of room for trucks to turn around?
- What is the proximity to highways, railways and ports?
- What are the floor weight-load requirements?
- Are there storage racks – and if so, what are the heights of the racks and the required clearance between rack levels? Of course, this determines how tall the building must be.
- How much inventory will stored at any given time?
- Does inventory require temperature and environmental controls?
- How many people will be working in the facility on a regular basis, and in what capacity?
- Does the facility need air conditioning and heat? (Air and heat may not be necessary if the building is made of concrete – a fan may be enough).
- Does the machinery generate a lot of heat?
- What are the combustibility risks and sprinkler requirements?
- How much power will operations require and can this facility accommodate the power requirements?
- Will there be office space required within the industrial space?
- What are the lighting and bathroom requirements?
- How many employees will work there and where do most of them live?
- Is there enough parking?
- Does the facility meet the latest zoning laws? These laws have recently become stricter, by the way.
Understanding that this list could go on and on, it’s easy to see that locating the right property for a particular purpose requires careful consideration of many factors and a depth of knowledge that can only come from real-world experience. The most effective way to ensure that you find the ideal location and commercial property for your next investment or business venture is to engage the assistance of a professional who knows all of the questions that need to be asked.
Grayson Powell is a Managing Partner at Coldwell Banker Commercial Sun Coast Partners (CBCSCP). CBCSCP leverages the vast experience of highly-skilled real estate professionals and developers and specialize in selling, leasing and managing retail, commercial, and investment property. To learn more about CBCSCP, visit www.cbcwilmington.com or call 910-350-1200.