The third quarter of 2016 has been a good one. The fourth quarter could be a blow-out good one! We will see. The biggest factors - the presidential race is finally over and a winner has been chosen. That by itself with no indication as to which one was the victor would give solace to any investor - stability will be coming. Investors like stability - you can plan beyond tomorrow and that is a good thing. The University of Georgia beating 8th ranked Auburn for their 4th SEC win and securing a bowl bid - well that is just more icing on the cake showing planning and stability for 2017!
Trump won, and nobody saw it coming - except 75% of the American people. The keys President-elect Trump has in his platform always included lower corporate taxes - investment encouraging tax positions. So guess what - if you haven't already bought that property, it is time to get off the grass and buy! When buying gets competitive prices rock upward quickly as there will only be a limited amount of quality dirt available for you to buy. Growth is happening NOW!
As an astute investor, there are always your own guides as to what to buy in hopes of a reasonable return on investment. Look no further than our own Federal government. Georgia is a good example - but don't try to jump in where it is obvious, you are already behind the times. Look beyond the obvious. Savannah is getting $650,000,000 to improve the harbor there. When they are finished, more and larger ships carrying more and more freight will be able to enter and unload in Savannah. Savannah will be 100% competitive with other Southeastern ports - Charleston and Jacksonville for example. What is another advantage will Savannah have?
Charleston brings in cargo offloading to be shipped up I-95 and I-26 and from I-26 to I-77 or I-81. Columbia, Greenville-Spartanburg, Charlotte, Asheville, all can benefit from shipments right from the port. Ask Boeing, BMW, Michelin if having a thriving port is important. But those companies have done something else in South Carolina - the lobbied for and received inland ports. Places that count as a point of entry for goods as if they were just off-loaded from the boat - and these are in Greer, Anderson, along I-85 in the upstate taking pressure off the roads.
Jacksonville - yes they too have I-95 all the way down and across the I-4 corridor where other goods are coming in from Tampa. But I-95 goes to I-10 and you can reach back across the state to compete with goods coming from Mobile in Alabama.
Savannah's infrastructure is just maturing. Guess who would be a perfect candidate for an inland rail system? Maybe in a rural setting like Franklin County, Georgia with I-85 running right through - servicing back to Atlanta and Mercedes or North to BMW. Or maybe just up Hwy 17 to US 441 - the heaviest traveled non-restricted interstate in the East. Now you can reach Knoxville, Chattanooga, and beyond, all from Savannah. Boy, if there were just an inland port in Lavonia, Georgia...oh, full disclosure, I do have some listings for you on or off the rail just off I-85 on the 4-lane Hwy 17. Just call. Ed
Monday, November 14, 2016
Tuesday, October 25, 2016
Who is Buying Now
If all politics is local it must be closely related to real estate - in particular commercial real estate! Who is buying and what they are buying is so local it is almost impossible to discuss legitimately beyond a certain area - unless you have the numbers. The numbers are the most important deciding factor for purchasing and many sellers do not understand that and just make assumptions based on old data or prices they could have gotten 10 years ago. What a mistake!
Which numbers, you may ask. Good question as it matters again, locally. That is where a real commercial agent makes a difference for you. They may or may not be CCIM certified and registered with all the expensive support groups, or not. If they are professional and informed they may be more valuable to you as a buyer than someone who just touts associations much like someone always name-dropping is supposed to impress you. Let's take a look at what someone should know about in your area depending on what it is you are considering purchasing and why.
1. Employment. If you are evaluating a number of locations for manufacturing, fast food, distribution, anything that requires employees we cannot just assume "build it and they will come." I live in an area where unemployment is at or about 5%. Recently Amazon announced hiring 500 people for distribution jobs. Soon after another larger manufacturer in the area announced adding 650 great production jobs. The hospital opened another huge location (the largest employer in the county) and 4 more smaller companies announced hiring. No people available for the jobs!
2. Housing. Take the above scenario then add this little tidbit in. Most of the people who will be taking the jobs that have been offered will want to rent for $800-$1200/month. If they are buying something it will be in the $150-250,000 range. We don't have any inventory of those products in this area - and since 2008 80% of the development companies that would have built those homes are no longer around - they have taken jobs somewhere else or even in a new industry. So where will we put them?
3. Training. Our local technical college provides something called Fast Start for employers moving into the area. Can you imagine the value to an employer to have someone very familiar with all the processes needed they can hire and start working on day one? Yes they pay for this service, but it doesn't negatively impact production - that is all done in the classroom.
4. Taxes. Here is a number everyone considers and few try to do anything about. Your agent should be educated enough to know who he can call, ask, beg, provide information for to impact what your taxes will be in the next 10 years if you bring those manufacturing or distribution jobs to this market. If not, find another agent.
5. Water. We aren't just talking EPA or state environmental agents - not just considering if you are going to leak something into the water but if you need water for your business. I have seen numbers for getting tied in to local water and sewer for some manufacturers running as high nearly to the cost of the land itself! Ridiculous you say? Nope, real. One small operator putting in a car wash paid $100,000 for the 1.5 acres on a major 4-lane. The initial cost from the county for the water/sewer service connection was proposed $160,000. They worked on it with their agent and the county and got it down to $80,000. Much worse in some instances with large water users in the food production business.
6. Access to Distribution. Many state highway transportation departments are finally getting some funding and are spending money - and they will spend it when future tax dollars are at stake. Make this point locally and get some help getting your products over to the 4-lane (12 lane) much more efficiently and safely.
7. Relative Cost of Land. If you can buy 1 block off the interstate for half the cost, is it worth it? If you can buy 40 miles further away from downtown metropolis for half the cost, is it worth it? Or maybe not half - but at what price is it worth it? Congestion, safety, speed of delivery, not all products go into town but does more than half go out of town? If you look at a major city, pick any major city. Is there an area that isn't as appealing regarding crime? Is there an area of town that is blighted? If you move into that area who is to say you can entice enough good workers to come there and feel comfortable changing shifts at 1 a.m.? But you save big bucks buying that piece of crap land, and it was encouraged by the city counsel, right? Do what is right for your workers too.
Just some thoughts about numbers not everyone considers. Please leave comments on some you have experienced as well.
Which numbers, you may ask. Good question as it matters again, locally. That is where a real commercial agent makes a difference for you. They may or may not be CCIM certified and registered with all the expensive support groups, or not. If they are professional and informed they may be more valuable to you as a buyer than someone who just touts associations much like someone always name-dropping is supposed to impress you. Let's take a look at what someone should know about in your area depending on what it is you are considering purchasing and why.
1. Employment. If you are evaluating a number of locations for manufacturing, fast food, distribution, anything that requires employees we cannot just assume "build it and they will come." I live in an area where unemployment is at or about 5%. Recently Amazon announced hiring 500 people for distribution jobs. Soon after another larger manufacturer in the area announced adding 650 great production jobs. The hospital opened another huge location (the largest employer in the county) and 4 more smaller companies announced hiring. No people available for the jobs!
2. Housing. Take the above scenario then add this little tidbit in. Most of the people who will be taking the jobs that have been offered will want to rent for $800-$1200/month. If they are buying something it will be in the $150-250,000 range. We don't have any inventory of those products in this area - and since 2008 80% of the development companies that would have built those homes are no longer around - they have taken jobs somewhere else or even in a new industry. So where will we put them?
3. Training. Our local technical college provides something called Fast Start for employers moving into the area. Can you imagine the value to an employer to have someone very familiar with all the processes needed they can hire and start working on day one? Yes they pay for this service, but it doesn't negatively impact production - that is all done in the classroom.
4. Taxes. Here is a number everyone considers and few try to do anything about. Your agent should be educated enough to know who he can call, ask, beg, provide information for to impact what your taxes will be in the next 10 years if you bring those manufacturing or distribution jobs to this market. If not, find another agent.
5. Water. We aren't just talking EPA or state environmental agents - not just considering if you are going to leak something into the water but if you need water for your business. I have seen numbers for getting tied in to local water and sewer for some manufacturers running as high nearly to the cost of the land itself! Ridiculous you say? Nope, real. One small operator putting in a car wash paid $100,000 for the 1.5 acres on a major 4-lane. The initial cost from the county for the water/sewer service connection was proposed $160,000. They worked on it with their agent and the county and got it down to $80,000. Much worse in some instances with large water users in the food production business.
6. Access to Distribution. Many state highway transportation departments are finally getting some funding and are spending money - and they will spend it when future tax dollars are at stake. Make this point locally and get some help getting your products over to the 4-lane (12 lane) much more efficiently and safely.
7. Relative Cost of Land. If you can buy 1 block off the interstate for half the cost, is it worth it? If you can buy 40 miles further away from downtown metropolis for half the cost, is it worth it? Or maybe not half - but at what price is it worth it? Congestion, safety, speed of delivery, not all products go into town but does more than half go out of town? If you look at a major city, pick any major city. Is there an area that isn't as appealing regarding crime? Is there an area of town that is blighted? If you move into that area who is to say you can entice enough good workers to come there and feel comfortable changing shifts at 1 a.m.? But you save big bucks buying that piece of crap land, and it was encouraged by the city counsel, right? Do what is right for your workers too.
Just some thoughts about numbers not everyone considers. Please leave comments on some you have experienced as well.
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