Three Quick Tips to Secure a Property in a Tight Market
The Los Angeles MidCounties can be summed up into one word, “HOT!” There are two main reasons for this is: there is no longer suitable vacant land for development in the LA MidCounties and we are in a strong economy. This has directly caused vacancy rates to sit around historic lows and has created massive amounts of competition for industrial warehouses that are for lease and sale. Additionally, this demand has created bidding wars between competing tenants and buyers. My three suggestions to leasing and buying warehouses in a tight industrial real estate market are: make a strong offer, be fast, and work with a broker that exclusively works the market you are looking to be in.
MAKE A STRONG OFFER
First and foremost, make a strong offer. It is extremely common for landlords to receive multiple offers on their properties and the best way to stand out is to submit a strong offer. In a soft market, you can be aggressive with free rent, tenant improvements, etc., however in today’s market, you do not want to shoot yourself in the foot. Too many times I see tenants make the mistake of coming in low on their offer and miss out on the opportunity to occupy a building that best fits their operation. Your initial offer should be based off comparable sale and lease transactions that occurred in the area of which the subject property is located in. Your offer should also include your company’s financial statements.
SPEED IS EVERYTHING
In addition to making a strong offer, another way to beat your competition is to be faster than them. Speed is literally everything in a tight market. From the time you review the available buildings, to touring, to making an offer, to providing financials, to negotiating, you must be quick. You need to beat your competition. There is not much time to sit around and decide what your next move is. My suggestion is to finalize your real estate requirements before going out and looking at product.
WORK WITH A LOCAL BROKER
Working with a broker that exclusively works the market you are looking to be located in is essential. A broker that works the market exclusively will know the comps, what is available, what will be available, demand, supply, and what local landlords are looking for in offers. A great local broker will know what is considered a strong offer, will be fast and through, and will know how to navigate effectively and efficiently through negotiations in order to secure the property for your company.
Utilizing all three of these quick tips will put you in an optimal position and potentially increase the likelihood of you securing a property that fits your industrial real estate needs.
Have an industrial real estate question? I would love to answer it. Please feel free to comment or message me with all of your questions.
Industrial Real Estate Broker
Inco Commercial Brokerage
La Mirada, CA