Volume 24, Issue 2 | Download
Guidance and Direction
by Jay Winer
Most articles I’ve written over the years have focused on efforts to keep Odenton Town Center, where A. J. Properties is based, developing, growing and prospering over the last 35 years! However, we also continue to work all over the region and have represented many clients in growing their businesses.
Recently, a friend of the family asked me my opinion regarding his company’s potential purchase of a new business. He provided some financial information on his “target” business and an analysis opinion by his CPA as to a possible “offering” price, but precious little else. Here at A. J. Properties, my staff and I did take the time for a cursory review of the financials and picked out a few items to discuss.
When I saw him a few days later, I explained that every business has its own and sometimes intricate and unique ways of operating, including space needs, staffing, capital requirements, cash flow and more. So, their valuation of their prospect business and how to negotiate further would only be possible if we could delve much further into the details of understanding that business and then perhaps we could help advise him.
A major part of our business at A. J. Properties is representing expanding, relocating or even downsizing businesses. We also help small start-up businesses, who are often overlooked by larger tenant representation firms. Using our own experience as developers, property managers, landlord and tenant in our numerous different business ventures, we are able to help guide the business planning aspect of decision making. Our success only comes from our client’s success.
Research, information gathering, financial planning and a sound business plan offer the best shot to find the right location and negotiate the best agreement for use, be it lease or purchase. Many clients don’t realize that the cost of that representation is usually free. Landlords or sellers will pay for the cost of bringing a viable user to them.
That’s why I’m so excited about my son, Adam joining our company as our Business Development Director. He brings not only his experience, but also a fresh approach to add to our knowledge base and our efforts at A. J. Properties at excellence in our business and those businesses we represent.
The Flats 170 at Academy Yard in Odenton stands on property once housing the WB&A Electric Railway “car barns” circa 1900 and the National Plastics Product Company (1941) that grew to employ 1,500 people in the 1950s. One of Jay’s earliest jobs was in the incineration room, tossing in excess waste from the manufacturing of cabinets.
by Stuart Title
As A. J. Properties ramps up its Tenant Representation Division, a scenario with a current client inspired me to write this article. The situation is, there are a few years left on their lease with an option. They also have an option to purchase the building, which is about to be partially renovated for the sole purpose of greater efficiencies utilizing existing space. I was consulted as how to handle the need at this time for more employee parking as they continue to grow.
So, in considering their parking requirement which is a microcosm of one’s location needs, it got me to thinking more macro as to the entirety of their needs and not just short term, but long term based on organizational goals and objectives as it relates to growth.
In doing so, we evaluated location needs on a short term, mid-range and long term basis. We weighed the cost effectiveness of exercising the purchase option, vs. exercising the lease option, vs. starting the search to relocate either prior to the end of the current remaining term, or sometime during the renewal term. Much has to do with the timing afforded by the original lease negotiated, allowing for the flexibility to accomplish the greatest number of scenarios.
With that said, we find many of our clients do not look at their lease until it is too late to make a proactive decision that aligns with their growth strategy, and they are forced into a reactive decision based on the landlord’s prerequisites and not their own. At A. J. Properties this is something we think about when we initially negotiate a lease on behalf of a client by “building” in some flexibility for the future, which is somewhat unknown even in the best of plans. What is the right amount of time to make a change differs depending on: need to renew; expanding within current location; expanding or contracting through relocation; purchasing a location; or developing your own facility.
What can you do today to help yourself tomorrow? If you’re a tenant, take out your lease and review it paying special attention to dates. If you own, make sure before you invest in your current location, that investment satisfies both short and long term goals that align with your current company goals and objectives, THEN call us to make arrangements to meet to answer any questions as well consult on space/location needs moving forward.
Once again be proactive and not reactive to your business location and space requirements. It’s in your control, until it’s not!