New Industrial Lease at 26420 Summit Circle, Santa Clarita, CA

The team of Mitch Fisher and Nigel Stout are please to report that they have recently completed a new five year lease transaction at the 30,344 square foot industrial property at 26420 Summit Circle in Santa Clarita. Mitch and Nigel represented the property owner DMC Development Co. The property features many modern amenities not found in comparable San Fernando Valley properties including 24' clear height, a large fenced yard and true dock high loading. This property leased after being on the market for only two months.

New Industrial Lease at 12638 Saticoy St. North Hollywood, CA

The team of Nigel Stout and Mitch Fisher are proud to report that they have just completed a new five year lease at the 25,316 square foot warehouse facility at 12638 S. Saticoy St. in North Hollywood, CA. Nigel and Mitch were originally hired to help a major ambulance company sub-lease the space. However, when they were able to locate another major ambulance company who liked the space and wanted to lease it for a term beyond the sub-lease period, Mitch and Nigel were able to negotiate a buy-out for the sub-lessor and a new five year lease directly with the property owner. 

What's My Industrial Property Worth?

I have been cold calling owners of buildings 25,000 square feet and larger, offering owners valuations of their property. Most everyone knows that it's probably worth a lot less than it was a few years ago, but how much less? In the past two weeks I have met with three different property owners. Interestingly, although I have been calling owners of all property types, each one of these is a uniquly different manufacturing property. Two of the properties are very similar with older +/- 65,000 square foot buildings on huge 6 acre yards. Both have excellent redevelopment potential, and these days the land value isn't too much different from the building value. As I have researched these properties I have learned that what they are worth today is not too much different from what they were worth 10 years ago. In fact, their rental value may even be a little less.  One is owner occupied and the other has been leased for 10 years. The third property was specifically built for constructing structural steel. It has a 38,000 square foot 30' clear metal building with oversize 25' x 25' doors and high capacity bridge cranes. This property also has two other 9,900 and 6,700 square foot freestanding buildings that could be leased to other businesses. All three buildings sit on about three acres. I am happy to say that this business is doing so well that they hope to move to a larger facility.

The owner of one property was really just curious about what his property is worth today, and really isn't interested in selling right now. That's cool with me. I was happy to meet with him and talk and learn about his plans for the future. One day, I may be able to help him.

If you want to know what your property is worth. I would be happy to talk with you too.

So Busy

I have been so busy showing buyers and tenants around lately. I have seen so many buildings from 30,000 to 150,000 square feet, I know all of the best properties and the best deals.

Busy, Busy

Has your phone been ringing more lately? I hope so. Mine has. But I like to think that I help make it ring. Right now I am working with two clients that I have known for years, but have never made a deal with in the past. Still, I have maintained contact with them and have always kept an eye out for good deals for them. Now, with so many good opportunities out there I am showing them properties again. One client is in the food processing business and is looking to purchase a small USDA ready building. The other client is a true manufacturing company and I have been looking for the perfect building for them. Right now we are exploring a build to suit at numbers close to what an existing older building would sell for. I am also deep in negotiations with freight forwarding company on a 50,000 square foot lease deal.

Just Sold 8975 Rochester Ave. Rancho Cucamonga

8975 Rochester Rancho Cucamonga was owned by my good friends the Haiman Family. For many years they ran their business Kustom Trailers out of this property. The propetry consists of a 5,500 square foot metal building on 1.8 acres of land. The propetry fronts the 15 freeway, but is well below grade level. In 2009 I assisted the Haiman's with a Lamar sign company electronic billboard lease on the property. The lease actually put into place an easement on the property. Lamar originally wanted to buy the lease outright for a $430,000 lump sum payment but that would have triggered the Haiman's due on sale clause with their SBA loan, so a 50 year lease was arranged with $3,600 a month payments. After marketing the property for over 12 months with no serious offers, Alex Garcia of Marcus & Millichap brought in an offer from a group hoping to open a recycling yard on the property. A deal was struck and after several months of greif getting their approvals from the City they were able to close on December 15th. They paid $995,000 for the real estate and $415,000 for the rights to the sign lease for a total deal price of $1,410,000. I wish Dan and the rest of the Haiman's the best of luck in whatever endeavour they now choose to pursue.

Easy Come, Easy Go

Over the last several weeks I have been working with a Chinese company who is new to the US. Although not critical to all, Feng Shui is very important to most Chinese business people. This always makes for interesting property tours, as sometimes I have taken clients to properties that I thought were great only to have them tell me that the property has bad feng Shui and won't work. So, after showing my clients multiple properties, they found one in Mira Loma that looked good. I presented an offer that asked for 4 months of free rent on a 3 year lease. We received a counter offer that only gave one month free. Also, because my clients had little established business presence in the US and little credit, but significant cash on hand, the landlords asked for 6 months rent as a security deposit. My clients were OK with putting up the security deposit, but really wanted 2 months of free rent, which I was able to get for them. The lease was set to start February 1. With February and March to be rent free. So, as we were drafting up the leases, my clients asked if it may be possible to also get the balance of January free. (about three weeks at the time.) After all, the building had been empty for months. The listing agent told me yes, it was not a problem so the early possession was put into the lease. Well, appareantly the listing agent never really asked his client about the early occupancy, and after my clients signed the lease and delivered their first months rent and substantial security deposit, the listing agent tells me sorry, no early occupancy. Needless to say, I was totally blown away, and my clients were very upset. So upset that they asked for the leases and their checks back. After a few hours of consideration, the property owner decided he would let them have the early occupancy, but it was too late. My clients decided they would wait 4-6 months and possibly buy a building then. Was the property owner being greedy? You decide. He certainly killed the deal and lost out on hundreds of thousands of dollars of income. This building has been empty for many months, and may now sit empty for many more, because he didn't want to give an extra three weeks early occupancy. What do you think?

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!