What business owners are saying about the high cost of real estate – Daily News

My days are full of business owner counseling. As you can see, my commercial real estate business focuses on family-owned manufacturing and logistics companies that are undergoing a transition.

In many cases, this migration will make decisions about those locations. As an example. Let’s say the operation is considering a merger. When two groups are transformed into one, their facilities overlap, and in some cases, excessive capacity occurs.

Our service is committed to disposing of excess space by selling or subleasing unnecessary space. Expanding to another state also requires a partnership with us. You can find a vacant building in need of a resident and negotiate a rental or sale transaction. A dramatic increase in orders can lead to the need for larger buildings.

Yeah, we’ve seen a lot of that transition lately.

But today, besides the concerns of commercial real estate, I would like to focus on conversations with entrepreneurs. After all, small businesses are the structure of our economy and employ a significant proportion of our workforce.

For 40 years as a commercial real estate practitioner, I’ve never heard of such anxiety.

Hiring is difficult. The 2020 pandemic put many at risk of unemployment. To counter this, state and federal governments have created unemployment benefits that can reach $ 1,000 a week in some cases. In addition, the period during which unemployed or layoff workers can receive these benefits has been extended.

As a result, workers were able to lead a fairly good life by not working. Now that our economy is reopening, manufacturing and logistics companies find it difficult to convince workers to return to their factories.

There is a serious shortage of candidates available for recruitment. Even before the pandemic, it was difficult to find skilled workers. There was a shortage of people operating machining and other special equipment. Currently, it is completely impossible to hire these professionals. In addition, our community college was not designed to prepare students for a manufacturing career.

Raw material prices are skyrocketing. Copper, petroleum, plastic resin, building materials, wood and steel are all in terrible shortage. I have doubts, do I say? Go to your local Home Depot and check the price of 2×4 timber. It is advisable to bring a mortgage broker with you as your purchase may require a second mortgage in your home!

Manufacturers are pinched at every stage, from stocking enough parts to make their products, to rising wages for those who run machines, to rising gasoline prices, which drive up transportation costs. Expect to see your notebook eventually affected.

Is the grass more green? Regardless of the size of the surgery, many I’ve talked to are considering placing it outside California. But are other states really more acceptable? Okay!

I have returned from a trip to Georgia on behalf of one of my clients. They asked us to set up three facilities nationwide. One is in the west, one is in the central United States, and the other is in the east.

Georgia and individual communities have been found to be very embracing the more than 200 jobs clients offer to the local economy. Incentives, deregulations, property tax rebates, building permit rationalization, sales tax reductions, industrial development bonds, employee training, tax credits for employment are all on the table.

I was shocked by the red carpet that was developed to meet the requirements. And here I thought the red carpet was only seen at the Academy Awards. Boy, I was wrong!

Government overkill. AB5, new AQMD requirements, minimum wage increases, noise reduction, and long permitting processes all affect the operation of a manufacturing or logistics company.

Owners are awake at night with uncertainties about property taxes, increased long-term capital gains, the possibility of abolishing tax deferred exchanges, and the absolutely crazy pricing of commercial real estate. You can find out the reason.

California, which I remember, provided a platform for accepting and succeeding SMEs — by standing aside. Hewlett-Packard, Disney, Microsoft, Apple, and Amazon all started with someone’s garage dream. How far have I drifted?

SIOR’s Allen C. Buchanan is a principal of Orange Lee & Associates Commercial Real Estate Services.He can reach at Or 714.564.7104.

What business owners are saying about the high cost of real estate – Daily News

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