Is your Commercial Real Estate UN-MARKETABLE?

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The typical industrial building contains several features such as its location, freeway proximity, favorable zoning, the size of the building, size of the lot, the amount of office space within the building, parking spaces, electrical service, fire sprinklers, ground level loading doors, dock hi loading doors, fenced parking or outside storage yards, warehouse clearance, truck turning radius, etc.

Occupants of industrial real estate will have some of these features as absolute requirements for their occupancy and some of the features will not matter.

Feature ladened commercial real estate coupled with your motivation to lease or sell your building will determine the speed with which your commercial real estate will attract a buyer or a tenant. 

I like to think of occupants as the universe of potential buyers and tenants. If your commercial real estate has EVERY FEATURE plus you are motivated to sell OR lease your building quickly, your commercial real estate will attract the largest percentage of the occupant universe. 

Your universe of potential occupants, with whom your commercial real estate resonates, retreats depending upon the lack of features. As an example, if you own a manufacturing building that contains an insufficient amount of electrical power, potential occupants will short circuit your building in favor of an electricity rich alternative. 

So with this context, what lack of features will cause your commercial real estate to be un-marketable in its present state? I have ordered these most to least. 

Deal motivation. If you ONLY offer your commercial real estate for LEASE and would not consider a SALE, you eliminate 40% of the universe...as this percentage of occupants ONLY wants to own their commercial real estate. 

Ceiling clearance. If you own a warehouse building that would find favor with a logistics company, that query would be quickly quelled if the height of the ceilings inside the building was 18 feet. Why? Because, the majority of warehouse occupants depends upon pallet stacking height to maximize their use of the space that they occupy.

Excess office space. Generally, manufacturing and warehouse-distribution occupants require a minimum amount of office space to house such functions as accounting, sales, clerical, executive, etc. If the amount of office space or the configuration of the offices is out of sync with the demand, your building will lay fallow. You see, the revenue from the operation is generated in areas other than the offices...in the back...where items are made, assembled, stored and shipped. 

Absence of loading. An industrial building that is greater than 20,000 sf will generally come equipped with grade level or ground level loading doors AND dock hi or truck hi loading doors. I've witnessed many instances where one of these loading options doesn't exist in an industrial building. From experience, I know that the missing loading will severely limit the number of occupants that will consider leasing or buying your building. 

Unrealistic owner. You may own the VERY best building in the market...feature full and open for business. But, the market is the market. If you are unrealistic in your expectations, and choose not to meet the market, you better have lots of staying power.