When manufacturing companies are looking for a new or additional location, they’re often concerned with the availability of quality labor, utility costs, freeway and rail accessibility, local and state taxes, and building availability and costs.
While these are all important considerations, there are some things to look at that might not be as apparent, which is why working with an experienced commercial real estate broker can help.
“Brokers will talk with members of the business community from similar industries to give their client a more three-dimensional picture of what it’s like doing business in the area,” says George J. Pofok, CCIM, SIOR, senior vice president of CRESCO Real Estate. “They’ll also connect with their area colleagues who live and work in those markets to give company executives both the 30,000-foot and on-the-ground views.”
Smart Business spoke with Pofok about conducting a nationwide site search and how brokers can help companies dig deeper.
What might be the biggest hurdle in conducting a national site search?
It can be difficult to get quality and timely data on building availability from existing databases. When casting a search that wide, it’s important to talk with state economic development groups in addition to searching the national databases such as CoStar and LoopNet. Commercial real estate brokers also can help companies in their search by tapping into the Society of Industrial and Office Realtors (SIOR) professional network to solicit potential sites that suit a client’s needs.
However, relying on listings is precarious. Properties as advertised are not always what they seem. Once properties of interest have been identified, phone calls should be made to all the listing agents to start verifying accuracy and solicit property brochures, photographs, floor plans and site plans.
How much weight should a company give to economic incentives?
Economic incentives can be extremely beneficial, but they often come with strings attached. Sometimes to get the benefit of an incentive a company needs to meet certain hiring requirements or pay a certain wage. But if the company fails to do so, which can be the result of factors outside of the company’s control, there can be clawback provisions.
Incentives are helpful but shouldn’t be the key driver for a decision to move. They should be weighed against other factors such as the state or county’s environmental regulations, corporate income tax and municipal tax rates. But all things being equal, incentives can tip the scales.
How can commercial real estate brokers help companies choose a site?
Many brokers come from full-service firms with coverage in most major markets, both nationally and globally. They can help tenants and/or buyers with site acquisition, incentive and location analysis, and often partner with their consulting arm to perform a network rationalization study, which allows companies to compare regions to determine the impact each would have on the different aspects of their businesses and end users.
Further, brokers can work closely with key individuals in federal, state and local government to vet initial search findings and see how each agency might be able to work with the incoming company. Being on the ground also allows a broker to determine if the local quality of life suits the business. They’ll look at housing values, the retail areas and other local amenities to give CEOs a good sense of the community they could soon become a part of.
What are some important qualities of the agent who helps conduct the search?
Look for a broker who has experience. If an agent hasn’t completed similar deals he or she won’t know the right questions to ask. Also, a broad network is key, in regards to both the firm he or she represents as well as his or her professional network. An affiliation with groups such as SIOR and the Certified Commercial Investment Member Institute (CCIM) provides a network of top-producing real estate professionals throughout the country. Ultimately, you need a broker who is diligent, works hard to earn your business, and is timely and responsive.
George J. Pofok, CCIM, SIOR, is senior vice president at CRESCO Real Estate. Reach him at (216) 525-1469 or firstname.lastname@example.org.
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