Back when the economy was booming, finding a vacant commercial real estate property was difficult. Businesses were expanding physically and growing economically. Business owners were venturing out and taking risks with new start-up ideas. Consumers were spending money which supported business owner’s financial plans and allowed them to have physical office/industrial/retail spaces. Then the crash came and the first thing business owners gave up, if their businesses allowed, was their physical space.
We still have not seen a full recovery, in my opinion, of the commercial real estate leasing markets in Nevada and Placer Counties in Northern California. The signs of this? Vacant commercial buildings sitting, for long periods of time, going unleased. And, what has changed dramatically since the last boom? The World Wide Web and Online presence of businesses. As the economy recovers, business owners have become savvy in their spending. Not having a physical location means less expenses. Virtually almost every business can operate via the web. If a business owner can operate out of their home office, they are doing that to save money.
So, when and how will we begin to see a recovery in the commercial real estate leasing markets in Nevada and Placer Counties? This will depend on many factors. Here are some trends that I have experienced in a recovering local commercial real estate economy in the Auburn, Colfax, Grass Valley and Nevada City areas:
- Business owners are joining forces to lease spaces together, which is more affordable and a win/win for the companies. Picture a nail tech, hair designer, make up artist, and esthetician joining forces to rent a commercial building together. Not only do they share the rental expense but they are also creating a natural anchor for each other in attracting clientele. I’ve also seen chiropractors, massage therapist, and physical therapist join forces. In the bigger cities like Roseville and Napa, we are seeing retail spaces that are combining these tenants together to create the synergy. Next time you’re in Napa check out the Oxbow Public Market. This is one example of how a struggling economy has listened to what the local market is seeking and created a space where people will feel good. And feeling good translates into spending! Consumers can shop, dine, partake in spirits and socialize all in one spot!
- Once vacant industrial, office, and retail spaces that were difficult to lease due to location, desirability, condition, etc. are now being looked at in a different light. Business owners are getting creative and transforming these deserted spaces into live/work situations. Of course, the local building codes and zoning of the parcel would have to comply with the uses, but when these opportunities are available, business owners are jumping on the possibilities. The Institute of Real Estate Managment (IREM) published a great article in their Jan/Feb 2018 edition of JPM (Journal of Property Managment) on a neat transformation of an old run down building in Orange, California. The owner is an architect and “looked beyond the dirt and grime – and saw an opportunity”. She transformed what was an old Ice House into a mixed-use property with offices, studios, and residential spaces. The full article is below for your reading pleasure.
If you have a vacant commercial building in Placer County or Nevada County California and are looking to get it leased, call or email Amelia Barrett at 530.470.3272 or amelia@barrettpm.com. She has market knowledge, industry experience, and community connections that can drive you in the right direction to successful investement property ownership.
