There is no replacement for in-depth local market knowledge. There never will be.
Our firm manages a number of large-cap and mid-cap corporate real estate portfolios, providing services from A to Z to the client across a wide geographic spectrum. The usual scenario is for our single point of client contact account manager based in one city to work cooperatively with a local, on-the-ground professional within our firm’s system. This provides the best of all worlds for the client—an account manager who knows its internal protocol and processes, and an expert in the field locally driving marketplace leverage.
I was recently reminded of just how important the “local” piece is. Over the past two years we have had the occasion to actively work on three to five lease requirements in two different submarkets: North Dallas and Las Colinas. Think you can really know a submarket well without being active within that area on a daily basis? I was reminded to think again! What a difference a few months can make in market conditions—and solving the puzzle for clients with the exact same set of options.
At any given time, the various factors influencing building options being considered will be in flux. Client criteria can be influenced by:
• Building owner strategy—What are the current leasing parameters and investment holding periods?
• Submarket dynamics—Lower vacancy levels and rising rents (or vice versa), and concessions.
• Loan maturation date—How much pressure does the building owner feel from an upcoming capital event?
• Capital dollars—Money that will be required to do a lease with our client, and exactly how those dollars are allowed to be spent.
• Client credit—In soft markets, owners crave strong stable tenancy, so we have more leverage.
• Tenant space requirements—Is this lease pushing the building occupancy level over a hurdle, or is it filling a difficult-to-lease piece of the overall lease up/value puzzle?
After being in this business for 28 years I can tell you, these elements change—sometimes daily. To get the best performance, no matter where you operate, it’s critical to have a partner who truly does know the local market conditions.
As senior vice president of UGL Services, Jim Lob co-manages the firm’s brokerage operations in Dallas. He specializes in large corporate headquarters relocations and build-to-suit projects. Contact him at [email protected].
