Professional Report - 2nd Quarter 2012

He explains, “I come to the warehouse, and inspect it with the
tenant. The tenant certifies the maximum square footage occupied
for that month as it is up to his client’s whim as to how many
bottles will be in the warehouse each month. Yes, it’s a little bit of
a headache as far as I’m concerned, but they are in the building,
paying rent, and have no desire to leave anytime soon.”
This wasn’t the first time Zimmer resorted to this flexible tactic.
Another tenant is a logistics company handling the warehousing
of Harley Davidson motorcycles. The company is in a 150,000
square foot building, but is only charged on 75,000 square feet.
Then we charge them the delta between the minimum and maxi-
mum they occupy in a given month.”
One of the most successful ways to make lemonade out of
lemons is to change the use of a property, notes Sheldon Gross,
SIOR, CRE, a principal with Sheldon Gross Realty Inc. in West
Orange, NJ, “We had an old warehouse in Monmouth County and
the warehouse market started to deteriorate. The building was
right on a busy highway, so, using the foundation of the old struc-
ture we constructed a new office building and successfully leased
it up.”
Since then the market changed, with too much office and not
enough industrial. “What we have started to do is get approvals
to put industrial space behind some of our office buildings where
we had a lot of property,” he says. “The location was away from
the highway and there had not been much interest in it. Now, with
industrial space in demand, we are opening it all up to industrial
and putting in a major road.”
Gross observes, “The only way you are going to succeed in any
kind of market is to be flexible because nothing stays the same.
Change is constant.”
It’s a good adage from Gross but it faces competition from
Geenty’s summation: “The only way to make lemonade out of
lemons is to fill the vacancies and get cash flow.”