A major component of maintaining your physical health is taking preventative action, so why wouldn’t the same be true about your real estate portfolio?
You have probably heard the old adage, “an ounce of prevention is better than a pound of cure.”
Truer words were never spoken and the idea of getting out in front of trouble before it starts can be applied to so many aspects of our lives, including real estate ownership and occupancy.
Perhaps the most obvious example of the value of this concept relates to our physical health. Dental insurers encourage us to visit the dentist twice a year to prevent tooth decay. Why do they encourage us to spend their premium income? The reason is a simple mathematical certainty: it’s less expensive for us both than paying for fillings, crowns and root canals. Likewise, a couple visits to the dermatologist each year is the least expensive and best way to treat damaged skin before it becomes cancerous.
The common theme here is that everything changes with time, circumstances and the surrounding environment. Commercial real estate is no exception. The health of our real estate assets can deteriorate over time if we don’t take good care of them, and as they age they experience functional obsolescence.
Each generation of industrial buildings are built with greater efficiency in mind. In this age of e-commerce, higher beam clearance, dock-high loading capability and ESFR sprinkler systems are the value drivers, while second and third generation buildings that are 18-foot clear and load from the ground level are falling out of favor. Those distinctions either limit or enhance a property’s value and usability for modern day distributors.
Market conditions are always changing around us. While our building stays in one place, the market around it is in a constant state of change as economic forces shape the business landscape. We have been reporting to you for years how far demand has been exceeding supply. Vacancy is just 3% as a result, but there are more than a dozen other market forces in play that influence the value of your property, interest rates, job and wage growth and construction of new inventory, just to name a few.
So, as the world around your real estate changes, what does it mean to you as the owner? Is your property still going up in value? If so, by how much? What are the most important metrics in your immediate area that are impacting the value of your asset? What macro-economic factors are influencing real estate decision making?
These and other questions are important enough for you to seek out the answers to if you want to stay out of trouble or find new ways to take advantage of changing market conditions.
That’s where we come in. Most real estate owners and occupants think our primary role is to locate assets and negotiate for their acquisition, disposition or lease once a requirement has been identified. We see our role much differently.
We believe that our knowledge, skill and experience is put to its highest and best use by helping you keep and maintain a thorough and real-time understanding of market conditions. Like your doctor who knows what to look for to prevent trouble down the road, we have our own specialized knowledge, experience and resources to assist you in that effort when it comes to the health of your real estate.
That is true whether or not you plan to engage in a transaction. It could be that your current situation is still optimized to meet your goals, just like when you go to the doctor and he gives you a clean bill of health and an ‘attaboy’ for taking such good care yourself.
So, with all this in mind, we prescribe a real estate “checkup” to make sure that your present real estate strategy remains in alignment with current and anticipated market dynamics. We would welcome the opportunity to share our perspectives with you and to learn more about how we can assist you in the years ahead.
Just give us a call to let us know what time works best for you, and we’ll be there.