Just Sold

8975 Rochester Ave., Rancho Cucamonga, CA

This property featured a +/- 5,500 square foot metal building on a+/- 1.78 Acre total lot area. I represented the seller. The sale price was $1,410,000.00

This was a unique transaction in that it included an income producing easement lease from Lamar Sign Company. (The property fronts the 15 freeway and has a new 50 year lease in place with a new digital billboard.) The buyers paid extra to have the lease included.

The buyers will use the property as a recycling facility. They had to obtain a special use permit from the City, which took some work, but which they were finally able to obatin.

Special thanks to Alex Garcia of Marcus & Millichap who represented the Buyer.

Thanks For Visiting

If you are visiting this Blog for the first time chances are you received an e-mail from me. I have been using e-mail blasts as a means to reach out to the industrial property community for about a year now. Every week I work on adding more e-mail addresses to my database. I now have about 1200 e-mail addresses that I regularly send to. I try to limit my messages to only once, maybe twice a month max. I do not want to be known as a spammer and only try to send out valuable market information.

You may have noticed that I use Constant Contact as an e-mail management system. Using Constant Contact has a number of advantages that I like. For example, one of my favorite features is it shows me who has opened my e-mail message, and also shows me who has opened any attachments or links. If I see that someone has opened my e-mails numerous times, or if they have clicked on a specific property brochure I will usually call that person to follow up and see if I may be of assistance. Constant Contact also allows people to opt out or unsubscribe, which is great because the last thing I want to do is annoy anyone.

I certainly understand that many people are just curious about what is going on the market, and that is fine. I also understand that timing is critical in the real estate game and that it helps to send out messages once a month to stay top of mind.

I probably do not update this blog as much as I should. For me, it is more like a digital resume where people can go to learn a little more about me.

Thanks for stopping by.

Mitch

Four Small Leases Completed in August

This month I have been fortunate enough to complete four Lease transactions. Details are as follows:

14762 Central Ave. Chino
6,100 Square Feet
2 year sub lease
I represented the Sub-Lessor

13653 Central Ave. Chino
13,380 Square Feet
4 year lease
I represented the Lessee

7240 Sycamore Ave. Riverside
21,928 Square Feet
3 year lease
I represented the Lessor

2036 Francis St. Ontario
5,247 Square Feet
3 year lease renewal
I represented the Lessee

More Signs of Action

In the past two months I have been able to generate offers on properties that I have been marketing for well in excess of 12 months. While these offers have not been fantastic, they are still offers when before I had none. As I monitor the industrial market in the Inland Empire I am now beginning to see a lot of the low hanging fruit being plucked from the tree. The time is now my friends. The market is bottoming. Who know how long it will last? Not I. One thing I can say is real estate is just like any other commodity. It is priced based upon supply and demand. For the past two years demand has been very weak, so prices have been very low. Now, it seems that demand is starting to come back, at least for the very low priced properties. But as these low priced properties get snatched up, there is only one way for prices to go, and that is back up. I don't see this happening quickly, but it will happen in the 12-18 months.

Signs of Demand

Finally there seems to be some indication that buyers and tenants are back in the marketplace. This is evidenced by the great month of May that my peers at Grubb & Ellis Company, Ontario and I just had, closing over 50 deals in 30 days. Needless to say we have not seen that kind of activity in many, many months. This certainly does not mean that the market is rebounding, in fact a lot of these deals took place at numbers that set a new low comp, but these comps help establish a realistic value that has been so hard to determine (or for many, just admit.)

Smart business owners will recognize that the next 6-18 months may represent one of the best opportunities in commercial real estate in years, especially as if activity continues at all like this.

Three New Listings

In the past two weeks I have been fortunate enough to secure three new exclusive listing agreements. Detailed information is availble by clicking the link at the top of this page.
Here is a little information on each:

7240 Sycamore Canyon Blvd., Riverside.
34,573 square feet
1,500 square feet of offices
4 ground level loading doors
2 dock high doors possible
24' clear height
400 amp power
This building is visible from the 215 freeway and is ideal for manufacturing, warehousing or retail. In fact many of the neighboring properties are furniture stores. This is a brand new, never been occupied building.
This property is offerd for lease at a teaser rate of $.25 per square foot gross.

1087 E. 9th St., San Bernardino
25,400 square feet in two buildings
Building 1:
13,400 square foot block and metal building
1,500 square feet of offices
12' clear height
5 ground level loading doors
200 amp power
Building 2:
12,000 square foot metal building
14' clear height
5 ground level loading doors
200 amp power
Total lot size is +/- 66,211 square feet
This is pretty low end manufacturing space. The current owner makes camper shells there.
The asking sale price is only $38.50 per square foot or $977,900.00

14762 Central Ave., Chino
6,140 square feet
500 square feet of offices
16' clear height
2 12'x14' ground level loading doors
200 amp 277/240 volt power
Fenced yard.
This is a nice small free-standing building with great frontage on Central Ave.
This building is available for lease at $.55 per square foot Gross
This is a sub-lease through August 31, 2012

These new listing should keep me busy for a little while!

A Taller Building Could Save You Money

Yesterday Richard Schwartz and I met with a large 3PL to discuss helping them consolidate. This company is currently in two buildings totalling about 650,000 square feet. These are older buildings that are only 24' clear. Their hope is to consolidate their operation into one  450,000 - 500,000 square foot, 30' clear building. As we all know, you pay for industrial property by the square foot, not the cubic foot. A 30' clear building could allow you rack 1 pallet position higher, thereby taking advantage of the cubic space that a building offers. Many times a 30' clear building will go for the same rate as a 24' clear building. For some it makes perfect sense. In this instance this company may be able to reduce their overall square footage by as much as 150,000 square feet, but still be able to maintain about the same amount of pallet positions. Let's say that 150,000 square feet is worth $.30 per square foot. That is a monthly savings of $45,000 or a savings of $2,700,000 over five years!

If you would like to do a cost analysis of your low clear building versus a taller building just let me know!

Mitch 909-974-4054

Networking with a 3PL

Today I received a call from Don Armstrong, the Director of Marketing for Third Party Logistics (3PL) providor NAL Syncreon. NAL is based out of Chicago, IL but maintains a +/- 155,000 square foot facility in Fontana, CA Like a lot of us right now NAL's business is down a little and about half of their Fontana facility is sitting empty. Knowing that sometimes a broker like myself might come across a company that prefers to distribute via a 3PL as opposed to doing it themselves Don gave me a call. Our conversation really made me think. For some companies a 3PL could really be the way to go, allowing you to focus more attention on designing, marketing and producing your product and less time being a shipping and distribution company. 3PL rates depend a lot on how many different times they have to handle your product but most will custom tailor a program specifically for you. If you're interested in speaking with Don contact me for his information.

Two New Transactions to Report

Last week I completed two different transactions.
The first, which is the top building shown on the right was a 10,000 square foot lease deal in Ontario. I represented the tenant, Mark Robinson of Performance Water Jet, Inc. Mark responded to one of my e-mail blasts and got an absolutely smoking deal on this property. Special thanks to Stefan Smith of Dale Fowler Real Estate who represented the Owner.

The second deal was a 8,750 square foot sale deal in San Jacinto. This property was a formal equipment rental yard and featured 4 roll up doors, a wash bay and a 2.2 acre fenced yard. This property was a Citibank foreclosure. Buyer Dale Dondel is a local off road race car builder. My partner Bob Griffith and I represented Citibank while I also represented the buyer.

Call me for the comp on either of these deals at 909-974-4054

Back From Vacation

Yes, I took a vacation. I really don't take many. Usually I just take a Friday off to make a long weekend. But this time I took a few extra days, and you know what? It was really nice. I didn't go anywhere fancy, just camping at Lake Buena Vista out near Bakersfield. Going to Buena Vista on Mother's Day weekend has been a family tradition of my wife's for years and it has now become a tradition for my family as well. Taking a little break from work to spend quality time with your family and friends can really help you put your life and priorities in perspective if you let it. After all, what are you working for? What motivates you and inspires you to do better, or to be a better person or to accomplish a goal that you have set? For me, it is my family. Nothing makes me happier than knowing that they are happy and well taken care of.

So the next time you have the opportunity to take an extra day or two off to be with the ones you love, I say do it! They will love you for it, and work can wait!

The Other Inland Empire

It turns out there is another Inland Empire. I found it on google just like I find most everything it seems. This one is up near Spokane, WA I found a couple of companies up there and added them to my e-mail list. Last October one of them responded to a quarterly market report that I had sent out. They asked if I had one for the Seattle market as they were thinking of expanding there. The company I work for, Grubb & Ellis has over 100 offices nationwide. Reports on almost every major market in the country are available on our company website http://www.grubb-ellis.com/  Today, that company contacted me again saying they were starting to look in the Seattle area for 50,000 - 100,000 square feet. I went to my Manager Dave Burback who knew right who to call in Seattle and before you know it I was sending out a great referral.

Hot Deal and a Hot Comp

In my post below I mention a lease on a 10,000 square foot building in Ontario that I am doing that starts at only $.35 per square foot gross. Well, there is a 15,000 square foot building in this complex that I think the owner would do the same deal on. Here are the terms I just negotiated on the 10,000: Three year term. Two months free rent up front. Year one $.35 gross. Year two $.37 gross. Year 3 $.39 gross. Three year option to renew with only $.01 psf increases. This is a nice tilt up building in Ontario with a yard. Call me at 909-974-4054 for more details.

This will give you an idea of how cheap properties out in the eastern Inland Empire are going for.
420 Harley Knox Blvd. Perris
84,201 square feet.
Sold for $45.00 per square foot!

This building was being marketed for sale at $65.00 per square foot. Just goes to show that sometimes making that low ball offer can pay off.

This is a +/- five year old concrete tilt up building!

Wrapping Up The Week

Another typical day in the office today. I am set to close an escrow a week from today and have been coordinating all of the last minute details between the buyer, seller and escrow to make sure that we close on time. Even the easy ones are never really easy, something always seems to pop up. But as my old boss Rick John used to say, "if it was easy everyone would do it." In this case everyone is cooperating and everything should work out fine. I'll post details of the deal once it is closed.

I also met with a new client this morning and showed him a very nice 10,000 square foot building that is for lease at only $.35 per square foot. He was pretty excited considering his current landlord has him paying $.60 per square foot for 5,000 square feet. He now has an opportunity to double the amount of space he has at almost the same monthly rent. How sweet is that?

Just to make things interesting, as I was sitting here typing I  got a call from a guy who wants to put a marijuana co-op in one of the multi-tenant properties that I do the leasing for. Most property owners will avoid these guys like the plague, and my owners probably will too. I'll call them and ask but most owners just don't want their properties associated with that use. The legality of them is still questionable, even though this guy insists that he is totally legit. What do you think? If anything comes of it I will let you know.

Have a great weekend!

The Lead Generation Business

It doesn't matter what kind of business you are in. If you sell a product or service you are always looking for the next customer or client. While I would consider myself an expert in selling and leasing industrial real estate, I am also an expert in generating leads. Really, when I think about it, at least 50% of my time is spent doing one form of prospecting or another. Some of the methods I use to generate new leads include:
E-mails. I have spent the last several years putting together a huge database of e-mail addresses. I like e-mails because with the click of a button I can send information to thousands of people all at once.
Telephone: Yes, I still work the phones. And no matter how many times I hear no, or how many messages I leave telephone cold calling is still one of the most effective lead generators I know of.
Letters: I like to write. (Can you tell?) I usually send out letters to promote a new listing or a recent sale or lease that I have participated in. Letters are good because people will hold on to them until they need you. Just this morning I met with a gentleman who has been holding onto a letter I sent him in 2007!
Door to Door: Walking door to door can also be very effective. At the very least if I collect a business card from a decision maker I should have their e-mail address, street address and phone number that I can use to e-mail, call or send a letter to.
With no real boss but myself and no one telling me what to do, staying focused on generating leads can be hard sometimes, but as they say " work makes work." The more I prospect, the more I sell or lease.

Good selling!

The Government!

I'm not going to talk politics. And this post is not about our wonderful federal government. It is about local governments. In particular either the City or County government that as a business owner you have deal with probably a lot more than you would like. For all the talk and hype that local city and county governments put out about how business friendly they are, complaints about how difficult it is to deal with these entities are some of the most common that I hear. I am all for doing things by the book, but when doing things this way severly hampers someones ability to conduct business I have to question why?

Here are a few of the top complaints:

Business Licenses / Conditional Use Permits: We all want to do the right thing, and to legally operate your business that means getting a business license from the City in which you are (or want ) to be located. A visit to the cities Planning Department will tell you if your use is permitted at the property you desire. If it is, you are lucky! But it still means you will have to shell out some cash for the license. Many times uses may be allowed, but with conditions. These conditions may include drastic improvements to the property such as street improvements, landscaping and installing block walls. You may be required to submit a site plan prepared by an architect along with more fees. If you are required to obtain a Conditional Use Permit (CUP) be prepared to spend some serious money and wait many months. Recently I leased a building to a group that wanted to operate an indoor radio controlled vehicle track. My clients were asked to submit a site plan of the property, a business plan and a traffic study. (Which cost them thousands!) The approval process took five months, and that was quick! Imagine the dilemma this puts a potential buyer or tenant in when they think they have found the right property but won't know if they can legally operate there until they go through this process. What seller or lessor is going to take their property off the market for 5-8 months only to possibly find out that their prospects CUP was denied? If you are in an unincorporated part of the County of San Bernardino you technically need a Minor Use Permit (MUP) or CUP to operate ANY business. When you ask the Counties Planning Department how long it will take to get a MUP or CUP you will be blown away! Six months for an MUP and 12-18 months for a CUP! This problem is so bad that many businesses operate without the Counties approval.

Racking Permits: A client of mine recently told me that it took six months for the City they were in to approve their racking plan and grant them permits to install their pallet racks. Six months! It takes a day or two tops to have an engineer design a racking plan. But it takes the city six months to finally approve it? My clients specifically leased a 30' clear building so that they could use a narrow aisle, wire guided system. For months they could only stack two pallets high while they waited on the city. They now tell everyone they know not to locate there.

Code Enforcement: Again, I am for doing things by the book, but some of these inspectors get pretty nit picky, and some of their requests are downright outlandish. Clients have told me that they: have been cited for having a sidewalk where a they want plants. They have plants where they want a sidewalk. They need to put up a block wall to screen their yard. They need a permit to paint their building.

Other top complaints include dealing with the AQMD or local flood control.

If you have had a problem dealing with your local goverment I want to hear about it.

John Husing's Inland Empire Economic Outlook Report

Today I e-mailed out a link to Economist John Husing's most recent economic outlook report. Mr. Husing is considered to be the authority on the Inland Empire's economy and his report is packed with information on where we have been, where we are now and where we seem to be headed.

I agree with John that the recovery is beginning, but that 2010 will still be a tough year for most.

If you did not receive the link, or if you would like more information on Mr. Husing, please check out his website at http://www.johnhusing.com/

Appraisers and valuing your real estate.

It seems like almost every day I get a call from an appraiser, calling to discuss a deal that I may have recently done. The sad reality is that there are a lot of banks and financial institutions out there attempting to value properties that they are either trying to refinance or possibly foreclose on. These days trying to value a property can be a little tough. There is still a lot of downward pressure on pricing and a comp from six months ago may be not be considered accurate today. A good appraiser will always call the brokers who have recently made a deal on a property like the one they are trying to value and ask them what they think the subject property might be worth. The brokers opinion is held in high  regard because who knows the market better for that type of property than the broker who just sold or leased a similar one? Some brokers try to avoid appraisers but I am always happy to talk with them beacuse I really enjoy talking about real estate. Also most guys will send me the other comps they have collected when they are done with the appraisal which only helps futher educate me.

A good real estate broker is also an expert property appraiser. And just like an appraiser when I value a property I will use all three methods of appraisal: The income approach, the market approach and the replacement approach. These days however a market approach valuation is the best to use as most deals are being done by users, not investors or developers. A market approach valuation is based on recent sale or lease comparables or comps. A comp is all of the details of a deal like; How much did the property sell or lease for? Was there any free rent? Did the owner pay for any tenant improvements? And so on. Every broker in my office submits comps from deals they have done, comps from other brokers they know and comps from appraisers they speak with into one giant database. I like to think that my office has one of the best sale and lease comp databases of any brokerage house in the Inland Empire. Since I have exclusive access to the largest database of the most recent and accurate sale and lease comps anywhere, I can quickly provide you with a very accurate and detailed opinion of value for your property.

In this highly competitive market pricing your property correctly can mean the difference between getting it leased or sold quickly or having it sit for months. If you are curious what your property might be worth  call me at 909-974-4054.

I can provide you with a quick ball park opinion of value over the phone or I can provide you with a much more detailed written evaluation backed by the hard data I discuss above.

Causing Some Controversy

If you are reading this blog chances are you found out about it from an e-mail I sent you. Yesterday I sent out  an e-mail that seems to have angered a few people. In this e-mail I wrote about how landlords are really taking it on the chin lately and that as a result there are some great opportunities for tenants or buyers. My intention of course was not to anger anyone. In fact I have created this blog and send out my e-mails to have the exact opposite effect, to try and help people and possibly introduce them to some good opportunities. But I actually had a gentlemen, who is a local property owner, leave me a message yesterday calling my e-mail insulting and calling me a bottom feeder. I also had a broker friend of mine contact me and tell me that some of his clients received my e-mail and that they did not like the message that I was putting out. I send my e-mails to all types of people. Some are large institutional property owners, some are developers but most are your typical mom and pop business owner struggling to make a living just like the rest of us. In hindsight, I can see how my message could anger some property owners. Like I said above lanlords have been hit real hard lately. Property values are down significantly and many owners have been paying money out of pocket every month to cover the mortgage on their vacant building. But I certainly never said anything that wasn't true. It is a buyers/tenants market now. Three years ago it was a landlords market. Times change. I'm just calling it like it is. For a moment I thought, is what I am doing bad? But then I received a call from a major developer this morning who told me he really appreciated my e-mails and the information I had been sending out and that he had some projects he wanted to discuss with me. I asked him, did my e-mail anger you? He said why? You don't make the market, it is what it is. And he is right. So for the time being I am going to continue my e-mails, and certainly this blog. Thanks for reading!

How is the Market?

Check out my new page How is the Market? The page includes a link to the Grubb & Ellis Co. First Quarter 2010 Industrial Property Report and some good insight as to what is going on in the market today.

Getting Some Reaction

Today I received an e-mail from Mark Robinson at Performance Wet Jet in Rancho Cucamonga. Mark's lease is up in a few months and he is thinking he might be able to get a better deal than what his current landlord is asking. I think he is right. Mark is looking for about 10,000 square feet. There are a LOT of buildings available for lease in this size. (I sent him a list of about 30 properties.) Some of the more motivated owners are priced at under $.40 per square foot Gross. I look forward to working with Mark and getting him well set up.

I Need Listings!

Today I have been focusing on getting a new listing or two. I typically have anywhere from 10-20 quality listings that I service, but now I am down to about five. In the past several months my partners and I have leased or sold just about everything we have listed, and in many cases we represented both the property owner and the buyer or tenant. When I list a property, I push it hard. I have a database of thousands of local business and property owners that I regularly call, e-mail and send letters to. I also spend a lot of time walking door to door, passing out brochures. We like to think that we are one of the most aggresive industrial marketing teams in the Inland Empire. If you have a property that you need leased or sold give me call at 909-974-4054

Good Networking

Yesterday I had the opportunity to meet with Richard Woolery and his crew at Hawthorne Lift Systems and Advanced Material Handling. These guys are the local Cat Lift Truck dealer and also experts at designing and installing racking and pick systems. We exchanged some leads and discussed how our businesses compliment each other. Richard and his guys cover all of southern California and will do a great job for you. Call Richard at: 909-923-9818

Getting the Blog ready

Today I have been putting up a lot of the information that appears in this blog. I have had several websites in the past but I like the idea of a blog because it is so easy to update and keep current. I hope you enjoy it.

Big listing pitch today.

Today Richard Schwartz and I pitched a listing on a building in Ontario that is just a little bigger than 100,000 square feet. We did a really good job and we are very excited about potentially working on this property. Hopefully I will be able to post full details on this property soon.