Michael Stone's Corporate Real Estate Blog

Don’t Let Your Real Estate Portfolio Collect Dust

2011-03-10T14:25:00.000-08:00

It is common practice for tenants to wait until the last minute to deal with critical leasing issues. This procrastination can lead to frustration, surprise and most importantly loss of leverage during real estate negotiations. A proactive and constant evaluation of current real estate information is the key to avoiding these pitfalls.

For companies who do not have the time or resources to maintain and effectively manage their own real estate portfolio, enlisting the help of a real estate provider is a great way to sustain their advantage as a tenant across all of their locations. Companies should search for firms that not only understand their company’s culture and how they generate profits, but can also advise them quickly and efficiently about upcoming issues, expenses and dates relating to their current leases.

Companies who are notified ahead of time that their leases are about to expire are able to thoroughly review their current real estate situation and in turn can strategize about their next approach. They can decide if they want to stay at their current location or if it is time for them to relocate to a new property. If a company chooses to renew their lease, they should then also work with their provider to compile as much information about their current location and market as possible. This will give them leverage when they try to negotiate the best deal available.

Evaluating every real estate opportunity leads to consistent results. Without a uniform strategy, companies are unable to effectively communicate and negotiate with current or potential landlords. Creating a metric system that identifies well in advance how an organization pursues real estate deals is the key to maintaining a consistent portfolio.

For more information about evaluating your company’s portfolio, please visit www.thestonegroupcre.com.

Location, Location, Location

2011-02-22T10:41:00.000-08:00

Now, I know every business owner has heard over and over how location can make or break a business. And yes, the idea of finding a superlative spot for a business seems simple, but when it comes down to it—what exactly constitutes a perfect location?

Price, quality and amount of space needed are obvious factors when choosing company’s location, but the key is to secure a location that directly correlates to the organization’s revenue—customer base. It may seem obvious, but we often get requests that contradict where a client should locate their next facility. Companies need to start their real estate search by understanding where their revenue comes from. An organization that provides legal services to clients in and around downtown should focus on office locations that are in the same vicinity. Title companies need to be close to residential real estate brokers, and orthopedic surgeons should be near or next to a hospital complex. Proximity to clientele or revenue generation should be paramount.

When companies are in the real estate market, they should also consider:

Location driven economics- Keep in mind that every market segment has different lease rates and class of space.
NNN Expenses - Don’t forget that each county and municipality will differ in utilities cost, taxes and common area charges. Just because your lease is being offered as a full service rate doesn't mean they don't pass those costs through. You will pay these costs regardless.
Economic Incentives - Before signing on the dotted line, research the potential economic incentives available for your company to locate/relocate in that area. States, counties and cities are providing strong incentives for job creation and product production. Stop by the chamber of commerce, along with the local EDC, and explain your business and potential employee growth. They may be able to offer development incentives, training dollars, or tax abatements depending on the size of space, number of employees and products created.
Time & Convenience- Your time is money—it is the same to your employees as well. Find a location that maximizes productivity. Unless you are based in Los Angeles, Chicago, New York, or DC, an hour commute for your key employees is too far away. Before you research locations, produce a zip code analysis that tabs where each employee lives and then pick an area that will best fit the group. This isn't a democracy, but it does help alleviate irrational decisions.

To narrow down your commercial real estate search, please visit http://www.thestonegroupcre.com/stone-group-research-request-form.html

Status or Service?

2011-02-03T10:04:00.000-08:00

When it comes to choosing a corporate real estate provider, to help your organization manage its real estate assets, picking the largest firm may seem like the best option. After all, you just need a provider that has the ability to find deals that are the best bang for their buck, right? Wrong. With today’s technology at the tip of every real estate provider’s fingertips, the real estate playing field is even. The size and popularity of a firm is no longer the key to credibility. Instead, the quality of service a real estate firm provides is now paramount and will always trump status.

As you meet with real estate firms to discuss possible real estate ventures, pay attention to who drives the conversation. Do the real estate experts ask you about your company and industry or do they command the conversation with their preconceived ideas? Real estate professionals should take time to listen to your needs and wants, not tell you what they plan to do for you without asking you for your input.

Finding properties that compliment your organization’s size, culture, finances and line of business can actually affect your company’s revenue. It is imperative that you hire a firm that not only understands the corporate real estate industry, but also understands the notion of finding locations that will help your company be successful and generate profits

At The Stone Group, we strive to uphold this concept. We want to thoroughly understand every aspect of our clients’ business, so we can find real estate opportunities that will drive revenue and compliment their company’s culture. As real estate professionals, it is our job to learn about our clients’ wants and needs and do everything we can to help them accomplish their goals.

For more information about The Stone Group and the services we provide, please visit http://www.blogger.com/www.thestonegroupcre.com

There is No Time like the Present

2011-01-25T11:33:00.001-08:00

As we move into the New Year, I believe the attitude of the commercial real estate industry, although still wary, is finally becoming optimistic. There is no doubt about it; we still have a ways to go. However, I think during the next two quarters we will see an increase in activity, and decisions on the corporate side will be made quicker. What will it take for us to transition from a small increase to a significant thrust towards a stronger economic recovery?

In order for us to put the recession in the past and move forward, there are two crucial elements that we will need to focus on. First, the unemployment rate needs to be much lower than the current levels. It may seem obvious, but job growth fuels our industry. A lower unemployment rate will increase companies’ needs to reevaluate their real estate assets and pursue new opportunities.

The second indicator is monetary policy—specifically how interest rates fare over the next twelve months. If rates stay on the lower side, for an extended period of time, they could stabilize decision making and transactions in the long run. On the other hand, apprehension of higher interest rates, in the short term, might rush deal completion and slow down business later in the year.

So, where does this leave the corporate tenant? With high unemployment and fear of wavering interest rates, many organizations are wondering when they should begin evaluating their company’s real estate portfolio and pursue new real estate ventures. Well, the answer is simple. There is no time like the present.

The combination of higher vacancy rates, low lease rates and landlords’ trepidation of losing good quality credit occupants is driving negotiations in favor of the tenant. In today's economy, companies should not be afraid to make real estate decisions. Instead, they should take advantage of this cycle and work with a corporate real estate firm, to examine their current lease situation and uncover potential money saving opportunities.

Stay tuned next week for my tips on choosing the best real estate firm for your company!