With Tesla, Apple Switch and others continuing to move into the northern Nevada industrial real estate market, the market has established itself as being in full recovery mode. This is very good news for our economy in general and especially welcome to landlords and developers. Prices have been steadily rising as interest continues. Vacancy is falling as space is absorbed at a fast rate. Tenants should continue to find adequate supplies of space options available within the market, but some specific size ranges are becoming more of a challenge. Developers are reacting by breaking ground on new projects that will be offered for lease. So everything is rosy, right? Well, not so much in all cases.
Tenants must be aware that the new product that is being built tends to be the latest version of the investment grade class A warehouse. These tend to be very large and very tall and at the forefront of technology and pricing. These locations are designed to meet the needs to the latest business model for large scale distribution logistics. But what if you aren’t the next Amazon.com? What if you don’t need a 36’ eave height or 45 dock doors or all the latest distribution technologies? What if you are a lower volume distributor or a manufacturer? What’s out there for you ?
The fact is that we see these type of users far more frequently than the Amazons and other super big box firms. There is product out there that fits your needs, but it is getting more and more scarce – especially for specialty users and manufacturers. In some cases, it makes sense to consider a build-to-suit project. If that applies to you, you should also seriously consider a build-to-suit consultant. But be wary – they are not all equal. Here’s what separates the good from the not-so-good.
Technical Experience
Technical experience is what sets the excellent build-to-suit consultants apart from the rest. All build-to-suit projects will have countless considerations that must be addressed, and that’s where an experienced consultant will prove his or her value. They will address questions that routinely crop up during these projects, including but not limited to:
· Can we modify an existing building? · What will it cost? · Which site is best? · Should we expect overruns? · Who are the best contractors?
An experienced build-to-suit consultant will answer these questions and more, offer calm guidance and work to bring you the best possible pricing and value while reducing or even eliminating risk. With a professional consultant at your side, you’ll have expert guidance every step of the way. Ask for an outline of services, and expect something like this:
· Preparation of the entire request-for-proposal (RFP) package. · Package review with developers or contractors. · Prescreening of proposed site locations and assessments for your consideration. · Preparing a list of developers/contractors. · Soliciting quotes. · Assisting in proposal evaluations and negotiations.
A Proven Record
Industry experience leads to a solid track record of build-to-suit projects. Ask for examples of successful negotiations. The best consultants understand the importance of presenting project requirements to developers and contractors, and they should be able to explain proper procedure clearly.
Be very clear – the developers and contractors have their own teams of agents, whose job it is to get the very deal in rent or project pricing from you while still winning your business. By hiring a qualified build-to-suit consultant, you’re ensuring that your interests are protected. Without a consultant, you’re on your own. And that’s a very unequal playing field.
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