The Twin Cities metro industrial commercial real estate market is following national trends. Vacancy rates are dropping and asking rents ($PSF/NNN) are rapidly increasing. Whether you are looking for heavy manufacturing, light industrial, warehouse/distribution, or flex industrial (includes office), the metro CRE market is tight, especially properties with outside storage.
So, how can you take advantage of a commercial real estate purchase in a tight market? Here are my five tips to keep in mind:
1. Gain access to deals by working with a commercial broker. We know that many listings in these conditions never reach the market. We are seeing deals happen without being publicized, but we can utilize our connections to find those off market opportunities. In addition, we will walk you through each step of the process with efficient and timely negotiations to get your deal out in front of others.
2. Be prepared to make a quick decision. Listings move fast when the amount of unoccupied space is low, especially in smaller building sizes (10,000-50,000 SF range). Have your financing together and be mentally ready to make a speedy offer.
3. Think and act strategically. If you have the cash, tighten up the contingency timelines and finance later, if possible. Do what is needed to “get control” before other parties. There’s a lot of money out there, and competition is fierce.
4. Go into the process with your eyes open. Know your needs but be open to opportunities you may have not considered. There’s no perfect building in this market, so you need to be thinking creatively.
5. Don’t overthink the process. This is not the market for “analysis paralysis!” Get your team to understand the perfect building may not be out there at this time. Quickly consider property locations, zoning regulations, and the physical condition. Most brokers can help you efficiently sort information so you can make an educated decision, even in this current wild west market.
If you have any questions or are ready to make the jump into a commercial real estate purchase, feel free to contact me at 612-788-1552 or jeff@CEGspaces.com. We are here to help.
Jeff Salzbrun is the owner and broker of Commercial Equities Group (CEG). As a veteran-owned real estate brokerage, CEG has been involved in many sale and lease transactions, ranging from single offices to 250,000+ square foot buildings. At CEG, we get your deal done. We know space, and we know the CRE business.
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