I provide location advice to owners and to occupants of industrial buildings in Southern California. Throughout my career, I have enjoyed assisting many businesses in evaluating their real estate options and am proud to share with you the process that I use in locating the "right alternative" for my clients.
Before we jump to the process, I would like to dispel a commonly held misconception..."the more the merrier". Some occupants believe that if they engage multiple service providers to accomplish the same task, a greater result will occur. I frequently hear "the more brokers that I have searching, the more alternatives I will see." Actually, the opposite is true because there is no alliance formed, no commitment is created on either side, and there is no accountability for the results.
For a commissioned sales person who is paid only on closed transactions, a minimum amount of time will be expended without a commitment and only the "natural" solutions will be presented. If the requirement takes a different turn or doesn't fit into the "natural category", the "right alternative" will not be presented. As an occupant, your time is valuable. If you will see more alternatives, spend your time more efficiently, and pay the broker nothing (the fee is paid by the owner)...doesn't it make sense to work exclusively with one broker?
We have
employed a systematic strategy in locating commercial buildings for tenants and
buyers of all shapes and sizes.
We are engaged by the client through a one page
exclusive engagement agreement which authorizes us to
search but does not authorize us to bind the client to a lease or purchase. The
client is not obligated to move or to pay us for our services. We seek
compensation from the owner of the property and/or operate as a sub agent under
a listing agreement with another broker if the property is listed. Our
experience indicates that this strategy produces the "best" economic deal for
the client and provides an efficient means of searching the market because we are your advocate.
We define the requirement, notify the market, qualify the
submittals, tour the alternatives, request proposals, negotiate the economic
points, work with counsel to negotiate and execute the lease agreement, oversee
the tenant improvement construction and celebrate the move-in.
We
have successfully employed this strategy recently with Western Air Limbach, KLS
Doors, Drake Controls, Raymond Handling Solutions, Orkin, Direct List
Technology, Advantage Adhesives, and many others. The steps we employ are
detailed below.
Defining the
Requirement
Overview:
We team with Raymond
Handling Solutions www.raymondhs.net
to help our client clearly define the requirement.
Raymond’s services are free of charge and can be invaluable in evaluating
warehouse, manufacturing, racking, operational flow, etc. An initial
determination of the size of the location is deduced. Our starting point is that
the relocation will require approximately "x" square feet of building square
footage and approximately "x" amount of office square footage. If a significant
change in the operation is considered…larger to smaller of smaller to larger, we
believe it is imperative to insure that we are searching for the correct square
footage and that the square footage considered will adequately house the
operation. After the requirement is
clearly defined, we prepare an outline of the requirement which provides the
market notification discussed in the following section.
Notifying the
Market
Overview:
The requirement letter is
converted into a “constant contact” email document and the email document is
e-blasted to approximately 1500 Southern
California brokers via our AIR mail database. We e-blast the
requirement once a week for the first four weeks and then once a week for four
weeks two months later. In this way we capture any new availabilities that
surface after our search has begun. We couple the market
notification with a deep search of all of the available multiple listing
services; AIR, ILS, CoStar, Loopnet, Rofo, Smith Guide.
Qualifying
the Submittals
Overview:
The
submittals are received and reviewed. The submittals are received from
cooperating brokers who have a suitable alternative listed or are aware of an
alternative that will soon be available. An example of this is the facility presently
occupied today by the company. If the company relocates as anticipated, the
building on that the company occupies will be available for lease or for sale.
Brokers are aware of the these “unlisted” opportunities and will make us aware
of such unlisted alternatives. Additionally, submittals
are reviewed from the multiple listing services…both currently available and
alternatives that become available during the search process. We will track ALL
new properties that hit the market via the AIR and ILS Hot Sheet and through the
Loopnet filters that we design. Probably the
most important aspect of qualifying the submittals is to get a complete
understanding of the ownership and the ownership’s motivation and financial
capabilities. If a significant Tenant Improvements allowance is needed, we need
to insure the ownership’s ability to provide the dollars necessary to construct
the Tenant Improvements AND to support the underlying debt for the term of the
lease. We will suggest that the ownership
provide us with a Non Disturbance, Subordination and Attornment Agreement which
will insure that the tenant's leasehold interests will be protected in
the event of an ownership default on the underlying debt. We will
preview all potential tour alternatives prior to the client
touring.
Touring the
Alternatives:
Overview:
Once the submittals have
been received and qualified, we will assemble a tour package with a summary,
brochures on each property, floor plans of each property, and a locator map. All
of the alternatives to be toured will have been previewed by the team and a tour
route established which maximizes the tenant's time. The tour package will
contain COMPLETE information on each alternative so that accurate consideration
of each alternative can be made. We will involve our
construction partner at this phase of the process. Prior to narrowing the
alternatives, we make a determination as to the viability and expense of
modifying and/or adding to the office layout. This includes a “test fit”, space
plan and cost estimate.
Requesting
Proposals:
Overview:
Once all of the
alternatives have been toured and a few of the best choices have been “test
fit”, space planned and cost estimated, we present Requests for Proposals to
four to six alternatives.
Negotiating
Economic Points:
Overview:
The team prepares a
comprehensive analysis of all proposals received. One to two of the best
alternatives are selected, chosen and negotiations commence to refine the
economic points. A non-binding Letter of
Intent is executed and forms the basis of the lease negotiations.
Lease Review
and Execution:
Overview:
The team works with local
or corporate counsel to negotiate a lease in conformity with the Letter of
Intent. The
negotiated lease is executed by all parties.
Construct
Tenant Improvement:
Overview:
The team works closely
with the contractor, owner, and the tenant to insure that the work is
progressing satisfactorily.
Move-in:
