Are you busy getting to the next project, going to the next place, making the next deal, getting the answer you were waiting for, driving to and from activities, and on and on? How can we appropriately weave in “waiting” for anything? Well, just wait and we will tell you… But seriously, when you are involved in industrial real estate transactions, there is a time for action and a time for waiting, and knowing which is which can make all the difference.
In today’s blog we will go over a few common scenarios and explore where waiting comes into play.
1. Waiting on making a decision
Faced with making decisions every day, let’s look at how and why we should exercise the practice of “waiting?” Whether just starting to consider a change or faced with a contract ready to be signed, while your approach and flexibility in waiting may be limited, this option is always there. But, properly exercising your waiting option is imperative so that you do not miss critical deadlines. Most importantly, waiting too long can result in missed opportunities.
2. Waiting on your current lease to expire
Often, tenants in leases believe their options to move are limited and they must wait to do anything because of the term remaining on their lease. But this is not always the case. Depending on market conditions and other factors, subleasing can often be a great solution for a company not looking to wait but rather looking to move before the end of their lease.
Other times, it may make more sense to wait and ride out the remainder of the term before a tenant does anything. If a company has a couple years remaining on a below market rent lease, it may be advantageous to wait before they relocate. However, if they believe the market will still be strong when they look to move, it may be more advantageous to move earlier and sublease.
3. Waiting to sell your building because you still need to occupy it
Often, owner-occupants of buildings would like to sell their property now to capitalize on the higher value of their building, but they still need a place to operate their business. In this instance, if you don’t want to wait, a sale lease-back is a great option to allow owners to realize the gains in their property now and maintain access to run their business.
Other times, it may make be more profitable to wait if the market is in a lower swing and you don’t need to sell the building at that moment.
4. Waiting on making a proposal to lease or buy
If you need more space, have discussed the market with a qualified real estate professional, and have identified a building or two that is suitable for you needs, why wait on making a proposal? The market is tight and buildings are scarce. Therefore, it may take a proposal or two before you secure a deal. And while no one likes a false start, if the deal does not come together agreeably after the initial proposal, you can always reconsider and wait to look for other options.
5. Waiting on making a counter-proposal or responding to a proposal
So, you are the recipient of a proposal and are faced with when to respond. Now is the perfect time to wait, for a reasonable period. If you were not actively marketing the space, you may request more time to understand current market dynamics. If you were actively marketing the space, you may want to wait before responding if you believe other qualified proposals are also coming. However, in both cases you don’t want to wait too long and thus turn away buyers’ interest. Therefore, we recommend being ready to respond to proposals more quickly if you are actively marketing the property.
In conclusion: How much can you really wait?
In any of these scenarios, which side of the deal you are on and how much leverage you have will determine how much actual waiting you can do. But regardless of which side you are on, waiting, even if just a little extra, can often help lead to the best decisions. But you also need to be ready to act quickly to secure a deal. Therefore, contact us today to discuss your unique scenario.
Christopher J. Destino, SIOR, a Principal at Lee & Associates, is an engaging, responsive professional who enjoys working closely with his clients and helping them succeed.