We hear it all the time in business – invest at the bottom, reserve at the top. Instead of following this mantra, uncertainty causes inaction at the bottom while greed pushes too much action at the top. While it is tough to time markets perfectly (we’d be retired if we could), we can control emotion and make good decisions for the long term.
Against this backdrop we regularly field the question, “Why would I move today?” Our experience shows that people want to move for one or a combination of the following: (1) save money, (2) expand or right-size a business, (3) a better location, or (4) own rather than rent.
Our clients’ own experiences provide some of the best examples of each. When her previous lease expired, Michelle Wicket, owner of Evergreen Home Loans, found a wide selection of properties available on the market. While the thought of moving is never easy, Michelle says, “We were able to secure a new space at a much lower rate in an almost new building with great visibility and accessibility for our clients. It was a great move for us!”
For Keith Lovell, owner of NorthWest Paint & Supply, this market presented a great chance to get the additional space he needed. He was able to move to a location that is 39% larger, but at the same cost. Besides the additional retail space, he moved to a location that is a better fit for his business and his customers. “Business has been going quite well in the new location. Being right on the road is giving my store a welcome increase in visibility. . .” One big mental obstacle to a move is often the perception that clients will not follow. Keith figured there would be 30-40% of his customers that might not be happy with the move. Keith explains that this perception was not true. “Turns out I’m getting about 90% positive comments from my customers. In today’s business environment having things work out better than planned is no small feat, so I would definitely have to say that I am happy with the move.”
Other clients are seeing this as a chance to right-size their operations and find space that helps with the bottom line. One client recently moved and saved 25% on rent, which means more money for expansion of core services.
When Budd Bay Properties made a move, Owner John Grantham was looking at the big picture. “Not only are we saving money each month in rent and utilities, but our location is in a very visible location on Martin Way, which has helped increased our business,” John explained. In these tougher economic times the move “allowed us to stay in business and start to grow again.”
Finally, it is a time to own rather than rent. While lease rates are quite compelling, it still makes sense for a great many business owners to purchase rather than rent.
A client recently purchased two properties – one as pure investment and the other as a location for their business. After taking a pass on purchasing five years back when prices were high and yields were low, they realized that today’s rates and prices made this the perfect time to invest. Having closed a couple of months back, they report being extremely happy with the investment and excited about the future.
We love these success stories during times when fear can lead to inaction. They are taking positive steps to position their businesses for even more success in the future. If you have any questions about local commercial real estate, give us a call, we’d enjoy discussing your goals and how they might work in today’s market.
