Friday, July 30, 2010
Thursday, July 29, 2010
Starting a Manufacturing Business? Contact Infinity Business Solutions!
The Client:
I represent a client who is investigating the process involved in starting an apparel manufacturing company in Orange County, California, Carla Buchanan Designs. www.carlabuchanan.blogspot.com. Yes, she is my wife of 31 (almost) years...yet I digress. We had the opportunity yesterday to discuss the process with Lily Otieno of Infinity Business Solutions. Infinity Business Solutions is a small-business consulting firm that specializes in working with business owners at every stage of their business development. Whether you are just beginning or are already up and running, Infinity Business Solutions will help you START, FUND, AND GROW YOUR BUSINESS! Lily told us that "Today’s businesses operate in an environment marked with challenges at nearly every turn. Infinity Business Solutions works with you to establish a solid and thriving business environment. By partnering with Infinity Business Solutions, you can focus on growing your business while systems, design, compliance, structural, and strategy matters are handled by Infinity Business Solutions."
The Attraction:
We were attracted to Infinity Business Solutions because we had heard that women owned businesses are now recognized as minority owned businesses and can qualify for government set asides if structured properly. We are very happy that we invested the time with Lily so that we will be mindful of the structure.
The Meeting Highlights:
We discussed name choices, entity creation...sole proprietorship, C-Corp, Sub Chapter S-Corp a or a Limited Liability Company (LLC). Lily was careful to point our that each entity has legal, tax, and compliance issues that should be further discussed with accounting and legal advisors. Additionally we discus ed procuring a tax ID number, a Dunn and Bradstreet rating (important for government work), and the nature of distribution channels, manufacturing processes, etc. Lily's services are billed on an "ad-hoc" basis which is important as the hourly bills aren't accumulated.
Personal Experience:
Lily and her husband DeShawn recently formed a chocolatier called"Grandma Betty's". Lily was a wealth of information on the "dos and don'ts of creating a manufacturing business! Please contact Lily. I know that you won't be disappointed! She can be reached at the below listed places:
Infinity Business Solutions
7327 Walnut Ave #A
Buena Park, CA 90620
United States of America
Bus: (714) 670-8941
E-mail: lotieno@ibsusaonline.com
I represent a client who is investigating the process involved in starting an apparel manufacturing company in Orange County, California, Carla Buchanan Designs. www.carlabuchanan.blogspot.com. Yes, she is my wife of 31 (almost) years...yet I digress. We had the opportunity yesterday to discuss the process with Lily Otieno of Infinity Business Solutions. Infinity Business Solutions is a small-business consulting firm that specializes in working with business owners at every stage of their business development. Whether you are just beginning or are already up and running, Infinity Business Solutions will help you START, FUND, AND GROW YOUR BUSINESS! Lily told us that "Today’s businesses operate in an environment marked with challenges at nearly every turn. Infinity Business Solutions works with you to establish a solid and thriving business environment. By partnering with Infinity Business Solutions, you can focus on growing your business while systems, design, compliance, structural, and strategy matters are handled by Infinity Business Solutions."
The Attraction:
We were attracted to Infinity Business Solutions because we had heard that women owned businesses are now recognized as minority owned businesses and can qualify for government set asides if structured properly. We are very happy that we invested the time with Lily so that we will be mindful of the structure.
The Meeting Highlights:
We discussed name choices, entity creation...sole proprietorship, C-Corp, Sub Chapter S-Corp a or a Limited Liability Company (LLC). Lily was careful to point our that each entity has legal, tax, and compliance issues that should be further discussed with accounting and legal advisors. Additionally we discus ed procuring a tax ID number, a Dunn and Bradstreet rating (important for government work), and the nature of distribution channels, manufacturing processes, etc. Lily's services are billed on an "ad-hoc" basis which is important as the hourly bills aren't accumulated.
Personal Experience:
Lily and her husband DeShawn recently formed a chocolatier called"Grandma Betty's". Lily was a wealth of information on the "dos and don'ts of creating a manufacturing business! Please contact Lily. I know that you won't be disappointed! She can be reached at the below listed places:
Infinity Business Solutions
7327 Walnut Ave #A
Buena Park, CA 90620
United States of America
Bus: (714) 670-8941
E-mail: lotieno@ibsusaonline.com
Tuesday, July 27, 2010
Ed McGlasson, Title Rep Extroardinaire
My Young Friend:
I met Ed McGlasson when he was an awkward ten year old. Ed had a shock of red hair, a face full of freckles, and a penchant for practical jokes. He once threw my older son's baseball cap out of the sunroof of my car on the way home from little league practice! Ed was an athlete even at ten as Ed's Dad had played professional football and influenced Ed's gene pool. I had the privilege of coaching Ed in Little League in Orange, California in 1994. Our Team was the Blue Jays, after the team from Toronto, and game gear was extremely difficult to find. The coaches resorted to a combination of Dodger and Royal blue for the game outfits. Ed was a talented pitcher and a clutch hitter, but his true athletic prowess would reveal itself in the next several years as Ed discovered golf.
Golf:
Ed became a prolific golfer at an early age and was consistently breaking 80 at Tustin Ranch Golf Club in his early teens. By the time Ed entered high school, he was a consistent low seventies shooter and occasionally broke 70. Ed went on to have a very distinguished high school career and broke all of the school's golf records. The University of Colorado seemed an unusual place to ply your trade in the golf field but Ed excelled once again as a collegiate golfer and turned pro shortly after graduating in 2006. Ed achieved early results as a pro, finishing second in the California Open and qualifying for the Nationwide Tour's Marc Christopher Classic. I was "on the bag" for Ed's medalist round at the SCGA course in Beaumont to qualify for the Christopher and the round is still one of the most pristine I have ever witnessed. Ed bogeyed the 18th for 66. I explained rather arrogantly to Ed that his golf career was in part do to my coaching...Little League, that is. If I had been a better coach in baseball, Ed might not have discovered golf...
Career Change:
Ed has decided to give up professional golf to pursue a career in Title sales. Many former professional athletes have chosen this vocation including Rich Saul, Bobby Grich, and others. Title sales and professional golf are dramatically different yet possess some similar elements...preparation, attention to detail, making contact...although with people, not a golf ball. I believe Ed will achieve success and this post is an effort to introduce Ed to my professional network. Please feel free to contact Ed and give him a shot at your next title requirement!
Ed can be reached:
I met Ed McGlasson when he was an awkward ten year old. Ed had a shock of red hair, a face full of freckles, and a penchant for practical jokes. He once threw my older son's baseball cap out of the sunroof of my car on the way home from little league practice! Ed was an athlete even at ten as Ed's Dad had played professional football and influenced Ed's gene pool. I had the privilege of coaching Ed in Little League in Orange, California in 1994. Our Team was the Blue Jays, after the team from Toronto, and game gear was extremely difficult to find. The coaches resorted to a combination of Dodger and Royal blue for the game outfits. Ed was a talented pitcher and a clutch hitter, but his true athletic prowess would reveal itself in the next several years as Ed discovered golf.
Golf:
Ed became a prolific golfer at an early age and was consistently breaking 80 at Tustin Ranch Golf Club in his early teens. By the time Ed entered high school, he was a consistent low seventies shooter and occasionally broke 70. Ed went on to have a very distinguished high school career and broke all of the school's golf records. The University of Colorado seemed an unusual place to ply your trade in the golf field but Ed excelled once again as a collegiate golfer and turned pro shortly after graduating in 2006. Ed achieved early results as a pro, finishing second in the California Open and qualifying for the Nationwide Tour's Marc Christopher Classic. I was "on the bag" for Ed's medalist round at the SCGA course in Beaumont to qualify for the Christopher and the round is still one of the most pristine I have ever witnessed. Ed bogeyed the 18th for 66. I explained rather arrogantly to Ed that his golf career was in part do to my coaching...Little League, that is. If I had been a better coach in baseball, Ed might not have discovered golf...
Career Change:
Ed has decided to give up professional golf to pursue a career in Title sales. Many former professional athletes have chosen this vocation including Rich Saul, Bobby Grich, and others. Title sales and professional golf are dramatically different yet possess some similar elements...preparation, attention to detail, making contact...although with people, not a golf ball. I believe Ed will achieve success and this post is an effort to introduce Ed to my professional network. Please feel free to contact Ed and give him a shot at your next title requirement!
Ed can be reached:
Ed McGlasson
National Commercial Sales
First American Title Insurance Company
National Commercial Services
5 First American Way, Santa Ana, CA 92707
Direct: 714.250.8523
Mobile: 714.931.1523
Fax: 714.481.9255
Tollfree: 800.854.3643
Email: emcglasson@firstam.com
Web: www.firstam.com/ncs
Social Media in CRE, Fad or Future?
The Premise:
I believe that social media will change the way that we as CRE practitioners do business! The trick is to figure out how to embrace the power of the media.
Background:
When I started in the CRE field in 1984, I was given a Rolodex and a phone. No one had cell phones, fax machines, or computers. Emphasis was placed upon making calls in person or on the telephone. You followed up with a hard copy of the business card in a "tickler" file. Inventory arrived via a broker mailer of the available space. We catalogued each listing into books of brochures sorted by city and by size. Surveys of avails took quite a while to prepare. Ownership records were accessed via microfiche. The business was much simpler and relied upon face-to-face relationships.
Slow to Change:
The CRE world is SLOW to embrace change as our residential counterparts embrace new things much quicker and more nimbly. Computers were not a necessary tool until the mid 90s and the Internet, websites, email, voicemail, and computerized MLSs weren't the norm until the late 90s.
The Wave...Time to Catch it or Drown:
Those in the CRE field who embrace social media will benefit greatly from the way in which business will be conducted in the years to come. If you doubt this, imagine your practice today without a smart phone, email, GPS, google maps, and all of the tools we take for granted. I found my old Rolodex in a drawer and gave it to one of our new associates, I told him it was my old computer. He looked at me like I was from another planet...youth!
I believe that social media will change the way that we as CRE practitioners do business! The trick is to figure out how to embrace the power of the media.
Background:
When I started in the CRE field in 1984, I was given a Rolodex and a phone. No one had cell phones, fax machines, or computers. Emphasis was placed upon making calls in person or on the telephone. You followed up with a hard copy of the business card in a "tickler" file. Inventory arrived via a broker mailer of the available space. We catalogued each listing into books of brochures sorted by city and by size. Surveys of avails took quite a while to prepare. Ownership records were accessed via microfiche. The business was much simpler and relied upon face-to-face relationships.
Slow to Change:
The CRE world is SLOW to embrace change as our residential counterparts embrace new things much quicker and more nimbly. Computers were not a necessary tool until the mid 90s and the Internet, websites, email, voicemail, and computerized MLSs weren't the norm until the late 90s.
The Wave...Time to Catch it or Drown:
Those in the CRE field who embrace social media will benefit greatly from the way in which business will be conducted in the years to come. If you doubt this, imagine your practice today without a smart phone, email, GPS, google maps, and all of the tools we take for granted. I found my old Rolodex in a drawer and gave it to one of our new associates, I told him it was my old computer. He looked at me like I was from another planet...youth!
Sunday, July 25, 2010
Saturday, July 24, 2010
The Perfect Seller and Buyer!
The Background:
As frequent readers of this blog know, I provide location advice to owners and occupants of industrial buildings in Southern California. Occasionally, the "stars align" and the perfect seller (owner) of industrial real estate is introduced to the perfect buyer (occupant) of industrial real estate! I am ecstatic to report that such an "alignment" occurred recently.
The Perfect Seller:
My partner, Jim Oliver and I were engaged to provide location advice to an owner of a manufacturing building located at 227 Meats in the City of Orange. The reason the owner needed location advice is a sad one, the door and window manufacturing company that he and his wife owned, was closing after approximately thirty years. The downturn in the housing market, lack of homeowner discretionary income, and competition had forced the company out of business. Fortunately, the location that housed the business since 1990 was VERY marketable due to the building's collection of amenities that manufacturing companies are seeking in a location...power, loading, fenced yard area, freeway access, etc. We advised the owner to price the building competitively. The owner allowed us to physically tour the competition with he and his wife which was monumentally enlightening and allowed the owner to understand our pricing recommendations. We also were strategic in the timing of the marketing as the owner was adamant about delivering the building to the market clear of equipment and "staged" for the showings.
The Perfect Buyer:
Approximately 60% of our transactions involve a cooperating broker...if we represent the owner, another broker represents the buyer. Such was the case in this transaction. I received a call from Mike Cargile, of Voit Commercial Real Estate Services. Cargile represented an occupant who needed a building which fit the criteria of the building we were going to market. The engagement agreement wasn't signed and the owners were steadfast that the building not be broadly marketed until the clean up was completed. We honored the owners request but recognized the potential of the buyer that Cargile represented. We were "crystal" clear when we explained to Cargile the status, wishes of the owners, and our position in the deal. Cargile respected the position, did a "windshield tour" of the building with his occupant and generated an "unsolicited" offer from his client. The buyer was a perfect match for the owner's objectives...educated to the market, well qualified financially, actively looking to move because of the inefficiencies of his present operation, in a business that could utilize the amenities in the building, etc.
A Happy Ending:
The seller sold the building quickly at a fair price, the buyer now has a new home that will allow him to continue to grow, and we were able to engage a lender that made a new loan, an escrow officer, a title officer, an architect, a general contractor, etc. Several trades got a "taste" of this transaction. Please visit the new occupant's website http://www.m-reng.com/. The company manufactures a wide variety of products for the automotive, electronic, plastic, lock component, aerospace, and fastener industries.
Friday, July 23, 2010
Thursday, July 22, 2010
An Amazing Couple of Days
Business Brokerage:
I had the pleasure of meeting with Johnathan Boyce from Murphy Business Sales. Johnathan assists companies who are analyzing whether to sell, buyers of companies who are looking to purchase businesses, and companies who need to have machinery and equipment valued. A business broker operates much like a real estate broker...representing buyers and sellers, authoring opinions of value, structuring marketing programs, etc. I have a much better understanding of the business sale industry and will be able to refer many clients to Johnathan.
A Large Manufacturing Concern:
We had the occasion to advise a large manufacturing company on their location options. This California based manufacturer is considering moving to Colorado. The company might be persuaded to stay in California if we can negotiate a more favorable lease rate for their present facility. The company has ten months remaining on a renewal that was executed in 2007. We have been engage to assist the company in weighing their alternatives. Helping keep manufacturing jobs in California is always a challenge as our bordering states are offering tantalizing incentives for companies to relocate.
A Local Multi Generational Business:
One of the most rewarding things about providing location advice is meeting entrepreneurs. People in Southern California figure out so many creative ways to make a living. The company that toured me through their plant this morning makes drapery for hotels and resorts. They also install flooring and are one of the few companies that I have encountered that provide contracting services, flooring and window treatments as a package. The company has survived the housing downturn quite nicely and is well positioned for the future. The second generation now manages the company and does so quite well. Give them a call. The name of the company is V-Corp and the phone number is 714.236.9855.
I had the pleasure of meeting with Johnathan Boyce from Murphy Business Sales. Johnathan assists companies who are analyzing whether to sell, buyers of companies who are looking to purchase businesses, and companies who need to have machinery and equipment valued. A business broker operates much like a real estate broker...representing buyers and sellers, authoring opinions of value, structuring marketing programs, etc. I have a much better understanding of the business sale industry and will be able to refer many clients to Johnathan.
A Large Manufacturing Concern:
We had the occasion to advise a large manufacturing company on their location options. This California based manufacturer is considering moving to Colorado. The company might be persuaded to stay in California if we can negotiate a more favorable lease rate for their present facility. The company has ten months remaining on a renewal that was executed in 2007. We have been engage to assist the company in weighing their alternatives. Helping keep manufacturing jobs in California is always a challenge as our bordering states are offering tantalizing incentives for companies to relocate.
A Local Multi Generational Business:
One of the most rewarding things about providing location advice is meeting entrepreneurs. People in Southern California figure out so many creative ways to make a living. The company that toured me through their plant this morning makes drapery for hotels and resorts. They also install flooring and are one of the few companies that I have encountered that provide contracting services, flooring and window treatments as a package. The company has survived the housing downturn quite nicely and is well positioned for the future. The second generation now manages the company and does so quite well. Give them a call. The name of the company is V-Corp and the phone number is 714.236.9855.
Sunday, July 18, 2010
Trusted Advisors; Greg Beck, Steven Stakely, Johnathan Boyce
My Power Team:
Bi weekly, I meet with three trusted advisors. These professionals and I have established a working relationship that allows us to open our books of business to one another and exchange business referrals. We have determined that each of us targets closely held companies with annual revenue of $1,000,000 to $20,000,000. Although our prospecting methods differ, we share a passion for networking and meeting people that can further our businesses.
Gregory W. Beck, CPA
Greg Beck has practiced accounting since 1981. Greg is a consummate professional and is a tremendous talent. Greg's tax and accounting practice is located in Orange, California at 1748 West Katella #107. www.beck1cpa.com, greg@beck1cpa.com, and 714.538.1040. Greg enjoys a wide variety of clientele including auto dealers, medical practitioners, and manufacturing companies. Greg and I share clients such as Apogee, Avani, Coast Aerospace, Advantage Adhesives, and others. Generally Greg provides "part-time" CFO services, forecasting, budgeting, etc. I can highly recommend Greg and his expertise.
Steven Stakely, Financial Consultant
Steven Stakley has a varied and extensive background in financial planning including time on the New York Stock Exchange as a bond trader. Steven is with AXA Advisors located in Irvine, California at 4 Park Plaza #400, steven.stakely@axa-advisors.com, and 949.833.5837. Steven advises companies and high net worth individuals. Steven and I share clients such as Adepteq and Raycon Industries. Consider Steven a trusted advisor as I do.
Johnathan Boyce, Mergers and Acquisition Intermediary
Johnathan Boyce evaluates companies that are considering selling and assists them in marketing the assets of the business. Johnathan is located in Anaheim Hills at 180 N. Riverview Drive # 200, www.murphybusiness.com/anaheimhills, j.boyce@murphybusiness.com, 714.983.7227. Johnathan represents a wide variety of companies. I highly recommend Johnathan and his expertise.
Bi weekly, I meet with three trusted advisors. These professionals and I have established a working relationship that allows us to open our books of business to one another and exchange business referrals. We have determined that each of us targets closely held companies with annual revenue of $1,000,000 to $20,000,000. Although our prospecting methods differ, we share a passion for networking and meeting people that can further our businesses.
Gregory W. Beck, CPA
Greg Beck has practiced accounting since 1981. Greg is a consummate professional and is a tremendous talent. Greg's tax and accounting practice is located in Orange, California at 1748 West Katella #107. www.beck1cpa.com, greg@beck1cpa.com, and 714.538.1040. Greg enjoys a wide variety of clientele including auto dealers, medical practitioners, and manufacturing companies. Greg and I share clients such as Apogee, Avani, Coast Aerospace, Advantage Adhesives, and others. Generally Greg provides "part-time" CFO services, forecasting, budgeting, etc. I can highly recommend Greg and his expertise.
Steven Stakely, Financial Consultant
Steven Stakley has a varied and extensive background in financial planning including time on the New York Stock Exchange as a bond trader. Steven is with AXA Advisors located in Irvine, California at 4 Park Plaza #400, steven.stakely@axa-advisors.com, and 949.833.5837. Steven advises companies and high net worth individuals. Steven and I share clients such as Adepteq and Raycon Industries. Consider Steven a trusted advisor as I do.
Johnathan Boyce, Mergers and Acquisition Intermediary
Johnathan Boyce evaluates companies that are considering selling and assists them in marketing the assets of the business. Johnathan is located in Anaheim Hills at 180 N. Riverview Drive # 200, www.murphybusiness.com/anaheimhills, j.boyce@murphybusiness.com, 714.983.7227. Johnathan represents a wide variety of companies. I highly recommend Johnathan and his expertise.
Thursday, July 15, 2010
Wednesday, July 14, 2010
Location Advice-Allen C. Buchanan, Lee & Associates: Seattle Based Lung Device Startup to Move to Irvin...
Location Advice-Allen C. Buchanan, Lee & Associates: Seattle Based Lung Device Startup to Move to Irvin...: "Seattle Based Lung Device Startup to Move to Irvine"
Location Advice-Allen C. Buchanan, Lee & Associates: Kilroy Realty Aquires New Office Building
Location Advice-Allen C. Buchanan, Lee & Associates: Kilroy Realty Aquires New Office Building: "Kilroy Realty Corporation, a REIT that owns manufacturing, distribution, and office buildings has acquired a new asset! Read about it here."
Monday, July 12, 2010
Sunday, July 11, 2010
Location Advice-Allen C. Buchanan, Lee & Associates: Lee and Associates
Location Advice-Allen C. Buchanan, Lee & Associates: Lee and Associates: "My Company, Lee and Associates Commercial Real Estate Services, Orange, California Brief History: Bill Lee, the founder of Lee and Associ..."
Lee and Associates
My Company, Lee and Associates Commercial Real Estate Services, Orange, California
Brief History:
Bill Lee, the founder of Lee and Associates, was a top producer at Grubb and Ellis in the 1970's. Bill's observation was that there was no intra office cooperation even though there was one agent in the office with a 30,000 square foot listing and another agent within the office with a 30,000 square foot buyer. An agent within the Grubb and Ellis office had zero incentive to cooperate with his fellow Grubb and Ellis agent...quite the contrary, in many cases the Grubb and Ellis agent would "pocket" the information so that he could "double end" the deal with his own buyer. Bill wondered if there was a way to create intra office cooperation through a sharing of commissions and profit.
The Birth of Lee and Associates:
Bill Lee and four of his Grubb and Ellis friends started Lee and Associates in 1979. The theory was simple but revolutionary; create a system that would reward profitability and encourage cooperation. Each of the original "partners" was free to broker in any area, call upon any client they chose (as long as another Lee agent didn't have an existing relationship) and the agents were encouraged to cooperate with each other. Profit was divided at the end of the year and apportioned to each partner according to his contribution to the profit. The resulting "splits" exceeded anything in the industry then and now. Lee and Associates "principals" (as we are now called) enjoy the best splits in the industry.http://www.lee-associates.com/
Catching the Wave:
Bill realized that in order for the firm to grow, he must expand geographically. Bill took the same concept and "sold" the concept to other agents in Southern California. The Anaheim (Orange office) was formed in 1983, Newport soon followed in 1984. The company achieved exponential growth in the next seven years as Ontario, Riverside, South Bay, City of Industry and Commerce, North San Diego County, Phoenix, West Los Angeles, and the San Fernando Valley offices were formed. The growth was made possible because of the "venture investment" structure that Bill created. Each principal was allowed to invest in the new offices as they were formed. The investment created the seed money to allow the new office to operate until it became profitable. A small percentage of the commission volume was used to pay a "return" on the venture investment. Now in addition to an incentive to share profits intra office, there was an incentive to share business inter office.
Present Value:
Lee and Associates is currently the fourth largest national commercial real estate company. We have 40 offices nationally and approximately 450 agents. Bill's vision has revolutionized the way in which brokerage is practiced.
Friday, July 9, 2010
Location Advice-Allen C. Buchanan, Lee & Associates: New links added for your convenience
Location Advice-Allen C. Buchanan, Lee & Associates: New links added for your convenience: "I have added four new links that should assist you. They are Loopnet, AIR Commercial Real Estate, LEED, and ADA. These links are under the h..."
New links added for your convenience
I have added four new links that should assist you. They are Loopnet, AIR Commercial Real Estate, LEED, and ADA. These links are under the heading "Helpful Links" at the lower right of this blog site.
Wednesday, July 7, 2010
The Buying Motivation
I am frequently asked by clients if they should consider buying vs leasing a location. I have carefully analyzed this over the years and have discovered several characteristics that most owners of industrial real estate possess. In no particular order, they are:
Time in Business:
Most owners of industrial locations have been in business at least five years. The reasons are simple. Size needs, financing, and cost regulation.
Size needs tend to become apparent after a company has a five year track record. If a company's size needs are fluctuating, the best course of action could be leasing a location with a series of options to extend. In this way, the company is not saddled with an illiquid asset that can hamstring growth. Once a company has been profitably in business for at least five years, a down payment can be generated as well as a track record for financing is created. Purchasing an industrial location with long term fixed rate debt is a terrific way to regulate the location cost of doing business!
Closely Held:
Most owners of industrial locations are closely held corporations and are not publicly traded. I am specifically referring to owner occupants as opposed to non occupant owners (investors such as Real Estate Investment Trusts). The reason is simple as publicly traded companies would rather avoid the earnings drain that depreciation of real property creates.
Market Conditions:
NOW is the very best time to purchase a location that I have experienced since 1984. Interest rates are at levels last seen in the Truman administration. Owners are extremely motivated to make a deal even at depressed pricing and banks want to rid themselves of non performing assets.
Time in Business:
Most owners of industrial locations have been in business at least five years. The reasons are simple. Size needs, financing, and cost regulation.
Size needs tend to become apparent after a company has a five year track record. If a company's size needs are fluctuating, the best course of action could be leasing a location with a series of options to extend. In this way, the company is not saddled with an illiquid asset that can hamstring growth. Once a company has been profitably in business for at least five years, a down payment can be generated as well as a track record for financing is created. Purchasing an industrial location with long term fixed rate debt is a terrific way to regulate the location cost of doing business!
Closely Held:
Most owners of industrial locations are closely held corporations and are not publicly traded. I am specifically referring to owner occupants as opposed to non occupant owners (investors such as Real Estate Investment Trusts). The reason is simple as publicly traded companies would rather avoid the earnings drain that depreciation of real property creates.
Market Conditions:
NOW is the very best time to purchase a location that I have experienced since 1984. Interest rates are at levels last seen in the Truman administration. Owners are extremely motivated to make a deal even at depressed pricing and banks want to rid themselves of non performing assets.
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