In some markets, it shows up whether you are ready or not. Decisions get made
quickly, options disappear, and hesitation has a cost. In today’s industrial
real estate market, however, urgency has become surprisingly rare.
You might be wondering why.
Let’s start with the occupant.
If you are a business owner looking for space, the process usually begins with
a clear need. You engage a commercial real estate professional, define what you
are looking for, and tour a few buildings. Inevitably, a couple rise to the
top. One might check most of the boxes, maybe even all of them.
But then time passes.
You circle back for a second look and something interesting happens. The
buildings you liked are still available. Not only that, but a few new options
have entered the market. The list has grown, not shrunk.
At that moment, a very logical thought enters your mind. The market is moving
in your direction.
And if that is the case, why rush?
Why commit today if waiting might produce a better deal, more concessions, or
an option that fits even better? So you slow down. You take another look. Then
another. And without really noticing it, the urgency that once existed at the
beginning of your search quietly fades away.
Now let’s look at the owner.
From the ownership side, the experience feels very different, but it leads to
the same result. The activity you are seeing is likely below what you expected.
The inquiries may be fewer. The proposals that do come in might not hit the
rental rate you had in mind. The use might not be ideal. The credit might not
feel as strong as you would like.
So you wait.
You tell yourself that the market will improve, that stronger tenants will
surface, that rates will return to where they were not that long ago. It feels
reasonable. It feels patient. It even feels disciplined.
But in that decision to wait, something else disappears.
Urgency.
What we are left with is a market where both sides believe time is working in
their favor. Tenants feel no pressure because options remain. Owners feel no
pressure because expectations remain. And when both sides are comfortable,
deals tend to slow.
It is not that demand has vanished. It is not that supply is overwhelming. It
is that the natural tension that drives decisions has softened.
Here is the part that often gets missed.
Markets rarely announce when the opportunity is at its best. They do not send a
signal that says now is the moment. Instead, they shift gradually, almost
quietly.
The tenant who waits for the perfect situation can find that the best buildings
are leased while they are still evaluating. The owner who holds out for
yesterday’s pricing can discover that extended vacancy carries a cost that is
far greater than a small concession would have been.
In both cases, the absence of urgency creates a different kind of risk. It is
not obvious. It does not feel immediate. But it is there.
So what is the answer?
If you are an occupant, recognize that having more choices does not mean you
have unlimited time. The market may be giving you leverage, but that leverage
only has value if you use it.
If you are an owner, understand that patience only works when it is aligned
with reality. Waiting is a strategy, but only if the market is actually moving
in your direction.
Urgency does not mean panic. It does not mean forcing a decision that is not
there.
It means clarity.
It means recognizing value when it presents itself and having the confidence to
act.
Because while urgency may be harder to find in today’s market, opportunity is
still there for those willing to move when it makes sense.
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.
