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!