Alaska Journey

Another state got notched into our travel belt this week as we concluded a cruise to Alaska. In a word - amazing! Ketchikan, Sitka, and Juneau were on our agenda. Photos do not do justice to the rugged wilderness of the 49th addition to our union. Hopefully, my words can. 
 
As we traversed the Endicott Arm and threaded through the Tracey Arms-Fjord, several chunks of blue ice were encountered. Akin to a punch bowl at the end of a party, these bobbing blue behemoths bathe in the icy waters - having parted from the mothership Dawes glacier and now headed for the freedom of open waters. I couldn’t help recall a comparison I once made to an iceberg and its similarity to a commercial real estate transaction. 
 
As occupants of commercial real estate, you focus upon a couple of things – the space and possibly the lease payment or monthly debt service. The space: Does it lay out well for your operation? Are there enough private offices for a collaborative work environment? Does the power into the building adequately support all machinery and equipment? Can you afford the monthly payments? If these boxes are checked, boom! You’re golden, right? Maybe not so rapido, my friends. If you focus on the space and the payments, you’re only seeing the tip of the iceberg. Similar to Dawes glacier, more than 80 percent of the transaction’s issues are lurking beneath the surface and can destroy your occupancy if not properly anticipated.
 
As the commercial real estate comparisons continued, I learned on this trip is the undeniable significance of location. In Alaska, remote and inaccessible areas are abundant, offering breathtaking beauty but also posing challenges for development. Similarly, in commercial real estate, the value of a property is often tied to its location, accessibility, and proximity to key amenities and transportation hubs. Just as Alaska's hidden gems require strategic planning to unlock their potential, commercial properties in prime locations can hold the key to successful investments.
 
The rugged terrain of Alaska prompted me to contemplate the importance of due diligence in commercial real estate transactions. Just as I carefully planned my hiking routes to ensure safety and efficiency, investors must thoroughly research properties, assess risks, and conduct comprehensive financial analyses before making decisions. Understanding the lay of the land, figuratively and literally, is crucial to avoid pitfalls and maximize returns.
 
Finally, the sense of adventure and discovery that accompanied me throughout my Alaskan expedition mirrors the excitement and reward in the world of commercial real estate. Exploring new markets, uncovering hidden potential in properties, and forging successful deals can be as thrilling as discovering an uncharted trail or an untouched wilderness.
 
My journey through Southeast Alaska left an indelible impression on my soul, and it also opened my eyes to the valuable lessons that can be applied to the dynamic world of commercial real estate. Whether it's embracing the significance of location, conducting thorough due diligence, or simply enjoying the thrill of exploration, this trip has enriched my understanding of both Alaska's wonders and the intricacies of commercial real estate.
 
So, fellow adventurers, as you set out on your own ventures in the realm of commercial real estate, remember to embrace the spirit of Alaska - wild, resilient, and full of untapped potential. 
 
Happy exploring and investing!
 
Allen C. Buchanan, SIOR, is a principal with Lee & Associates Commercial Real Estate Services in Orange. He can be reached at abuchanan@lee-associates.com or 714.564.7104. His website is allencbuchanan.blogspot.com.