Well, we are clipping along at warp speed – three months of 2021 in the books. But, occasionally, several issues burden my inbox. Therefore, please consider this column a “spring cleaning” of sorts.
Two recent appearances
Recently, I was honored to sit on a panel of commercial real estate experts and as a guest on a radio show. The cool thing was I never left my garage office. The Institute of Real Estate Management panel was conducted via Zoom and the radio spot over the phone. Coincidentally, both had similar themes: What impact has the pandemic had on commercial real estate?
Of course, the answer depends on CRE genre — industrial, office or retail. The differences between the three are as stark as the Mojave desert. Chances are if your company makes or ships things, you’ve high-fived your employees for a record 2020. Conversely, if you visit a suite of offices, you can bet the tenants are considering how to reduce their square footage, when the workforce will return – if ever – and how to conduct business in a hybrid environment, both virtual and in person.
Shortage of Inventory
Never, in all my years have I seen the shortage of industrial inventory this skimpy. At the same time, vacant regional mall space abounds.
You may be thinking, why not simply convert that vacant Sears store to a logistics hub? Good thought! But, the challenges lie with zoning and the physical plant.
Simply, that behemoth store that formerly housed more Craftsman tools than the Carpenter’s Union once generated monster sales taxes for its city. Warehouses don’t. Plus, modern industrial buildings are equipped with much higher ceilings, so the cost to retrofit would be mammoth.
Prices, prices, prices
The acute lack of available industrial space has caused prices to jump higher than a Gonzaga player at the buzzer. Yeah. Maybe next year, Bruins. But I digress. In one small slice of the Inland Empire East and in a sliver of sizes, we’ve seen was a 12% hop in pricing — in just four months!
My favorite time of year
NCAA Final Four, MLB opening days, Masters golf tourney, the fragrance of Orange blossoms, more daylight. All are experienced this time of year!
Considered: A tournament basketball game is akin to my profession – you lose, you go home. Consolation doesn’t pay the bills. Professional golfers start their year the same way brokers do – at zero earnings with no safety net.
Finally, 162 baseball games over six months is a marathon. Some of our deals are long races as well.
Live, live, live
Three of my close friends have gone home to the Lord in the last 30 days. I’m reminded. This is not a dress rehearsal. It’s caused me to focus on what’s important. I’ve squeezed my loved ones a bit tighter, looked past petty squabbles and choose to live each day as though it may be my last.
Rest In Peace Erik, Kevin, and Mike!
Allen C. Buchanan, SIOR, is a principal with Lee & Associates Commercial Real Estate Services in Orange. He can be reached at abuchanan@lee-associates.com or 714.564.7104.
Source: Orange County Register
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