But some communities have found themselves with little or no land available for new buildings and are at capacity in existing buildings. Thats pushed the focus away from breaking ground for a new site to refurbishing an existing one.
Theres a much smaller supply than there was five years ago or even seven years ago, warns William Nice, a principal with commercial real estate firm Chartwell Group LLC. (But) new construction is still going strong.
All of that building has created a strong second-hand market, he says.
There is a little more existing real estate coming on the market. As companies are building new buildings, eventually there are going to be old buildings that are going to become available. It took a while, and theres not an oversupply of existing buildings.
Thats something Nice is adamant about.
Industrial real estate, he says, has not been overbuilt to any degree.
So which is better building a new site or renovating your existing one?
That depends on your goals.
We typically bring one of these people in who are construction experts and look at the building and talk about what the clients needs are and come up with a retrofitting plan, Nice says. We try to get a number as to what it will cost to make this building usable.
Nice says that is a key consideration which must be factored in before someone buys a building in addition to the purchase price, how much will they have to invest into renovations to make it work for their business?
And how does that investment compare with simply buying a plot of land and constructing a new building that meets the companys needs?
How to reach: Chartwell Group LLC (216) 360-0009
Daniel G. Jacobs (email@example.com) is senior editor of SBN.