Leasing or buying industrial property is not the province of real estate brokers alone. In many companies, warehouse and DC managers are expected to get involved in these transactions. Keeping an eye on market trends with the assistance of an industrial real estate specialist can help managers identify the best time to buy or lease, said Bob Mohr, chairman of the real estate firm Mohr Partners, in the "Supply chain/logistics Real Estate Optimization" session at CSCMP's 2010 Annual Global Conference in San Diego.
For example, Mohr said, when real estate demand is low, so are prices. That means now may be a good time for companies to buy the property they want before both demand and prices rise again, as they inevitably will. Buying can often be more cost-effective than leasing, he added, so if you're confident of the market, then act fast. To underscore his point, Mohr told of one California client that dilly-dallied and missed out on a $4 million savings as a result.
Mohr also discussed the intricacies of negotiating a favorable lease for warehousing and distribution facilities. Among his many practical recommendations: br>
To get the full picture of the financial impact of the properties you lease or own, Mohr recommended conducting an annual review or formal audits of your entire portfolio. This should include a look at all of the properties and their related costs individually and in total.