Three Questions to Ask an Agent Before an Industrial Lease
What Can You Tell Me about the Current Industrial Real Estate Market?
Don’t settle for generalizations here. You’re asking direct questions, and you should expect clear, comprehensive answers. Ask for specifics and numbers relating to vacancy, absorption, asking lease rates, concessions, and overall trends. Inquire further about area submarket trends and what your agent will do to thoroughly familiarize you with them. An experienced agent will be able to produce graphic collateral material that easily explains the local market and submarkets, and he should be equally prepared to clearly explain it. If you’re asking questions that your agent seems unprepared to answer – without being able to say why – take note. The point of this question is to both confirm an agent’s competency and experience, as well as identify potential areas in the market that may work well for your needs. If an agent’s answer fails to do either, keep looking.
What Can You Tell Me about Major Market Ownership Entities and their Relative Positions?
A keen awareness of the local market’s ownership players and their overall position is an enormous advantage. In answering this question, your agent should be able to demonstrate an intimate awareness of local developers, their staff, their market presence, and their general tendencies. Your agent should also be able to identify and explain pending or potential market shifts. If these aren’t topics being discussed before an agent starts scheduling property tours, there are large pieces of the puzzle that are missing.
What Can You Tell Me about Previous Deals You’ve Negotiated in this Size and Price Range?
Ask for a list of comparable transactions in the size range you’re considering. A particularly organized agent will already have this ready to go, but if not, note how long it takes support staff to generate it. Major delays in retrieving this data may be an indication that an agency doesn’t keep information easily accessible, a potential sign that they’ll have trouble advising and guiding you on your deal. If you receive reports not generated within the agency itself, but through services such as Co-Star or Loopnet, proceed with additional caution. Not only is this data likely inaccurate and incomplete, it’s another sign that the agency doesn’t track market comps itself. And it’s a problem. This is critical data that you are relying on your agent to have so that he’s able to negotiate the best transaction possible on your behalf. If your agent can’t impress you on this point, you should be seriously questioning his ability to assist you at the level you deserve.
If you’re considering leasing or buying industrial property in northern Nevada, Miller Industrial Properties can help. Please contact us at your convenience to schedule a meeting – and don’t forget to ask us these three questions. You can also use our Property Recap for a fast, free report outlining local properties meeting your specific criteria.