Information, information, information the—three most important words in real estate – Insiders Outlook
A real estate expert once complained that some businessmen are so caught up in the mystique of real estate investment that they spend less time on real estate purchases than they do buying a new car.
Accountants, lawyers and real estate professionals have long recognized that wise decisions must be made with considerable information about the needs of the company, as well as the characteristics and locations of sites.
With ever-changing zoning laws, environmental requirements, land-use legislation and new needs of technology and industry, site selection has become one of the most sophisticated aspects of ensuring a business’s survival.
How can research be used?
The survey technique, which is commonly used in product development, can also be applied to the problem of locating land or a building. Before any survey can be conducted, however, the real estate needs and a precise description of needs must be defined. What are the personnel requirements? The transportation needs? How about access to materials? A ready access to talent and other human skills must be considered in addition to other variables. After a profile can be worked out, it is then possible to design an ideal location description.
How to gather the data
Power sources take priority when selecting a facility. Public and private utilities, as well as government agencies that regulate them, can be the best sources of information. Talk with other companies in the area that have similar power needs. Ask them, in particular, about the policy on rate increases over the years and whether the sources have been reliable. There is nothing worse than to have a plant dependent on electricity with no power because of a summer air-conditioner overload. This kind of information must come from utility customers; the power companies don’t like to discuss such unpleasantries.
Geological information is available from local government agencies or universities, especially when there might be problems of ecological misuse. Land surveyors and soil testing consultants, as well as civil engineers, often have information from previous work in the area. However, where specific information is important, current data must be bought from competent consultants.
Getting a handle on the labor market can be a tricky problem. Each state has an agency loaded with statistics to help, but there is no substitute for some form of current and direct evaluation. Begin with the figures available from the state, but spend most of your effort trying to disprove them. Talk with personnel people in the area; see if there is a chapter of the United States Office of Personnel Management nearby that can give you information. Above all, don’t make decisions solely based on the information supplied by state industrial development commissions. In their zeal to attract industry, they can be misleading. Not that any of them will give you false information, but there can be the possibility of them leaving out information that might have a negative effect on your decision.
Asking questions directly
Everyone has a personal bias, so it is unwise to ask only one person a question and to rely on the answer. Ask as many people as possible, and be sure to ask the questions in the same way so that you do not introduce a variation that could cloud your results and interpretation. Remember, you have a bias as well. You are interested in the site and are more than likely looking to confirm a judgment you may already have made rather than to knock holes in the place. When you phrase questions, try not to give the impression of the answer you want. People are usually anxious to please, and telling you what they think you want to hear is one way of doing this.
Use existing records
Start with an evaluation of public records. The department of labor in each state can provide the data you will need to determine level of wages being paid, skills available and if there is a shift of workers in or out of an area. An inward shift usually indicates a growth situation that will be conducive to expansion. An outward shift should be watched closely; other industry may be leaving, and resources may be drying up. However, an outward shift may not be important to some industries and an incoming industry is often welcomed because it could become the employer that takes up the slack left by exiting industry. Before you consider this possibility, ask why industry is leaving. If the reasons have nothing to do with factors that could affect your business, it would be wise to consider the location.
Only by conducting in-depth research on a user’s requirements from a financial, location and operational perspective, can you properly select a facility that makes sense for your business.
Working with a real estate professional whose business philosophy is centered on market research is the most effective way to successfully meet your business’s facility requirements.
Sheldon Gross, President And CEO, Sheldon Gross Realty
COPYRIGHT 2003 Hagedorn Publication
COPYRIGHT 2004 Gale Group