Commercial Investment Real Estate is the magazine of the CCIM Institute, the leading provider of commercial real estate education. CIRE covers market trends, current developments, and business strategies within the commercial real estate field.
Issue link: http://cire.epubxp.com/i/923123
CCIM.COM January | February 2018 17 Situational Awareness Typically, corporate relocation occurs either to reduce costs in prohibitive tax, regulatory environments, or to use incentives other municipalities may provide. For example, California's Farmer Brothers is a coffee company that packages and supplies more than 90 million pounds of coffee per year. Apparently, the company is leaving California to lower its operating costs and expand to a new build-to-suit facility in the Dallas/Fort Worth area of Texas. According to the Dallas News, Farmer Brothers estimates by moving to Texas it will save up to $20 million annually. Where does a commercial real estate professional start in the study and analysis of sectors and industry groups to determine demand, over capacity, or an increased need for capital expendi- tures that would lead to building more space? Start by looking at industry reports and pricing trends in the stock market, as well as tax rates and the regulatory environment in different states. An annual report from a leading company in an industry group will reveal vital data a commercial real estate professional could use to understand the expansion dynamics of a firm, as well as the key company officers. Sometimes trends will be obvious. During the past few years, many companies have moved out of California, for example, to states where lower tax rates, more incentives, and fewer regula- tions can reduce a company's operating cost significantly. Also, the stock market is an anticipatory pricing mechanism where the market will price a stock or industry group based on predictive events projected far into the future. The business cycle and rapidly changing technology will continue to create oppor- tunity for the astute real estate investor and commercial real estate professional. Nathan Bragg is managing director at RE/MAX Commercial Division in Rancho Cucamonga, Calif. Contact him at nathanbragg@remax.net. During the past few years, many companies have moved out of California, for example, to states where lower tax rates, more incentives, and fewer regulations can reduce a company's operating cost significantly. CCIM Development Specialty Track To learn more visit www.ccim.com/dev-track or call (800) 621-7027, opt 2 Next Classroom Courses: Introduction to Development Workshop Date: May TBD Location: Vancouver Date: September 26-28 Location: Phoenix Tuition: Member: $985 REALTOR®: $1,135 Non-member: $1,285 Course Formats: Classroom and Online Instructor-Led The CCIM Development Specialty Track program is one of the industry's leading continuing education concentrations, providing commercial real estate developers, investors, and consultants with a comprehensive understanding of the entire process of development from due diligence to disposition. The program content is structured around the Real Estate Development Matrix developed by Daniel Kohlhepp, Ph.D., of the world-renowned Johns Hopkins Carey Business School.