As a follow up to last month’s guide popular guide, Expanding Your Footprint: A Guide for Leasing More Cold Storage Space, this guide aims to answer what to do if you find a building to occupy but it is only available for sale, not lease, and you do not have the capital available to purchase the building. Suppose you have been following along with these guides, and have explored new construction. You have looked at it from both angles, do-it-yourself, and as a tenant to a built-to-suit development, and neither works due to time or budgetary constraints. You’ve started to zero in on leasing existing space and completed an exhaustive search for available properties. Unfortunately, its slim pickings. Further, let us consider that in this hypothetical, only one availability surfaces. The location, layout and even the temperatures work. One problem: The building is for sale, not for lease. Worse, your business is not in a position, or you have no interest in the burdens that come with real estate ownership. Perhaps you have a short-term customer contract and only want to commit the business to an occupancy of matching length. Though this may initially seem like a roadblock, in actuality there are two clear and distinct paths you can take as a detour toward the destination of occupancy.
By understanding the motivations of real estate investors, including the seller of the building that has been identified, you will be able to navigate a win-win structure for all parties involved. The first option that we’ll explore is convincing the seller that it is in their best interest to lease the property to you first, before selling the property. The second option is to find a third-party real estate investor to buy the property on your behalf, while your business becomes their “tenant in tow.” Each of these paths offer unique advantages to the seller and one may stand out as an obvious choice depending on your market dynamics.