Flex Space: If You Build It, They Will Come
How entrepreneurial-minded business owners can leverage their commercial real estate space for additional revenue
Wake County is growing by 64 people a day according to WakeUP Wake County. With that kind of growth, companies are having a hard time finding existing space to relocate their expanding business. Flex space is a sought-after real estate sector, and now is the time to build.
If you talk with any small- to medium-size business in the Triangle that is looking for new or additional space, they will tell you about the lack of flex space in the market. Commercial brokers are continually searching for new flex space for their clients, and when they find it, it doesn’t last long. The Triangle is ripe for anyone who has the financial means to build new flex space. If you build it, commercial tenants will come running.
Due to this high demand, companies looking for flex space are willing to pay above market average rents. They are desperate and need the space to expand their business. It’s a landlord’s dream market right now, and it shows no signs of slowing down. If you have been looking for existing space and can’t seem to find anything, maybe it’s time to build your own flex space and earn added revenue leasing out the rest.
What is the first step?
Contact a builder that has experience designing and building flex space. Design-build is the construction delivery method in which the architect, engineer and general contractor team up at the beginning of a construction process to help control costs and schedule overruns. They offer a turn-key process that enables you to focus on running your business while they focus on your new building. A builder will be able to give you a rough budget on the overall project costs and steer you in the right direction as to how much space you are going to need.
Can you afford to build?
Once the builder has helped you create a budget, the next step is figuring out how you are going to finance the project. Speaking with your current financial institution is a great place to start, especially since they already have all your financial information. If you want to talk with other financial institutions, your builder will be able to recommend banks that are seeking to invest in this type of real estate project.
Where should you build?
Finding a commercial broker is the next step in the process. A broker will be able to help you locate the right piece of land for your project. This can be a challenging part of the process due to the lack of land availability in the Triangle, but working with a broker will make the process a lot easier. If you do not have an existing relationship with a broker, your builder can provide referrals based on your requirements.
How do you evaluate land?
Once you’ve found a piece of land or multiple sites you’re considering, the next step is to get the civil engineer on your construction management team onsite to help evaluate the options. The civil engineer on your team will be able to tell you if the land will work for your needs and help you determine how much it will cost to develop. The cost of the land alone should not be the deciding factor when purchasing land. Factors like utility availability, necessary road improvements, topography of the land, parking capacity and surrounding traffic patterns should all be considered when purchasing land.
Final step: design and build
Once you have secured your financing and found the right piece of land, the next step is to work with your construction management team to move forward with the architectural design, permitting and construction process. Your design team and general contractor will also be able to give you a timeline of how long they expect the process to take. An industry average is 12 months for design and construction, depending on the municipality in which you are building.
Now is the time to build. The market is begging for flex space, and you can capitalize on the demand. If you are having trouble finding existing space and want to explore a new construction investment, contact Bobbitt to discuss your options. We are an integrated firm serving North Carolina and South Carolina. We are your single point of contact with a single contract, making the process seamless.