| Finding a Site for your Business |
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Drive down the road, in any central business district and you’ll see a sign on almost every property. To you and your “site acquisition team” it would appear as if finding a site will be easy. Then, apply your site criteria: type of real estate, ideal size for the space, target submarket, and demographics; water in the bucket is beginning to get shallow. Just when you think you have a reasonable number of options, many landlords will not deal with you for existing non-complete agreements in their current leases, or they simply want to limit competition for their existing tenants in a strained economy. There is also the challenge that many landlords are publicly traded entities, who grossly overpaid for their properties in the last boom. Accordingly, the fiduciary obligations these groups owe to their shareholders and values they leveraged with debt, force them to solely deal with companies who, in their opinion, have made it, and will stand the test of time continuing to pay substantial rent until the economy begins to rebound from its current downturn. Then, you layer in challenges for zoning and parking, and after that, you realize that use restriction ordinances may require obtaining a conditional use permit. For all these challenges in today’s market, it is important to have a highly qualified commercial real estate acquisition team. You need a team who can “conserve the water in the bucket.” No need to worry, a properly trained, well experienced tenant representation specialist can lead that team.That team starts with a commercial real estate broker who specializes solely on representing users of commercial real estate (tenants and buyers). Though landlords pay commissions, your broker has to have professional training to identify, and avoid, conflicts of interest. In addition, your broker must have the requisite training, skill and experience, garnered over hundreds of transactions and hours of study, which will make it easy for listing brokers, principals and municipalities to deal with your needs. Additionally, your broker should have the foundation of knowing how real estate partnerships, corporations, and REIT’s are structured and taxed, to properly set your expectations. All these qualifications will ensure that fruitless bargaining is avoided; that will maximize your time and limit your frustration. Finally, your broker should have substantial first-hand experience assisting clients in obtaining permits and licenses from municipalities. In addition, it would help if you also had an attorney who specializes in real estate transactions, and not just with regards to the law, but also one who has an intimate understanding of current commercial real estate market conditions, standards and norms. You wouldn’t have an orthopedic surgeon do brain surgery, would you? Your broker should be a masterful marketer of your business, artful in combining the elements landlords are looking for when considering a prospect for their real estate, and someone who knows how to package your business and sell a concept. Acquiring commercial real estate is more than writing offers on mortar, bricks and rent. Finally, it is critical that the leadership of your site acquisition team assist you regardless of where you are located, locally or nationally, so that you can have a single point of contact for every transaction. If you build an acquisition team, with the right tenant representation specialist, you will find “the bucket isn’t empty and you won’t go thirsty.” |