We have reached the point where we need a another large industrial building and shop for our equipment and Truck parking/ maintenance. I have been trying to get quotes from people to put up a 60 by 90 building with 20' eaves so I could walk my log loaders inside without tilting the cab. In 6 months I have not gotten anybody to give me a quote on an erected building on my property but I've gotten one quote on the kit and that was $85k for roof, poles and trusses. No siding, framing, concrete, site prep, wiring, permits, rock, ect. I am going to look at this building today as it has everything we need but the drawback is price & it's 30 minutes from my house. I have never obtained commercial property financing before, how difficult is it and what are the terms usually like? Thoughts?
Can't comment on the price being good or high since property values vary widely across the country. Depending on the area, road infrastructure, etc that's a lot of building on 3 industrial zoned acres. If the owner is correct and you can fence the alley then that really adds value to the parcel. It would be tough to build that building with permitting, engineering, site work and the building here for $500,000 on a 3 acre parcel in an area you don't need guard towers with Mini-guns attached to them. A 3 acre industrial zoned parcel with decent road infrastructure and access to the Interstate would run $175K -300K. Just the PMB package for that building would run $125-$175K not including the bridge crane. Add $35-50K for the slab, $50K for electrical and so on gets to that sales price less property quickly. I have a little over 1 acre yard zoned industrial in the suburbs that is fenced, temp. power, water and sewer - no building and it's worth around $150K. My neighbor built a 5,000 SF building with 16' eaves and single slope roof (being is own GC) for $130K just the building with a small office build out (20x20) and 2 bath rooms. He already owned the lot and I did the site work on a horse trade. He buys and sells surplus building materials so he also horse traded with various trades through the build. All of the commercial real estate I've financed over the years has been either 15 or 20 year terms. I built the buildings with a construction loan that turned into a perm loan so the sweat equity of building acted as a down payment. Best guess is you'll need 10-20% cash down to finance. The loans I negotiated (construction to perm) were with local banks that held the loan. Don't know about now but at least back in the 2000's commercial loans are not sold like residential loans are. Commercial lending is more relationship oriented.
Very good information, thank you! I will report back, meeting with sellers agent now.
don entus old shop ?
Yessir.
That would be a good price by me, and our land values tend to be lower. Looks like a nice big yard with easy access and turn around. 3 acres so you could build a different building in the future for expansion. Looks like a well set up shop building. That's a really nice yard. Gravel, already fenced. Unless you already have the ground, I don't think the price is out of line. But I don't know property values for commercial in that area, but it doesn't seem out of line for what it is. Little building for a office? Its nice that the two parcels are together, because if the white building sold, it would be a pain to use the blue building. I think inflation is soon to happen, so I'd say go for it. Its not much $$$ at the rate we're printing it. Inflation will make that seem like a cheap price in the next 5 years. (I think, but I also thought tesla was overvalued a year ago and look how wrong I was on that).
It's a good price but Aberdeen's pretty depressed too. It looks like you'd have to at least remodel to put in a taller door or two. since you're willing to go that far if you looked at the raw land situation there?
Doors are 16x16, that will fit all of our needs. Yes, the harbor is not as desirable as Olympia or the I-5 corridor for sure.
Being there is probably why they aren't asking 1.25 Mil.
You buy, you walk in and start working right away instead of being a construction project manager for a year or two. Neighbors are already used to its use as a shop and yard.
No remodeling of those doorways without getting rid of the overhead crane, rail runs just over the doors.
My calibrated eyeball didn't see a 20-ft door?
Craneop you hit the nail on the head. With interest rates as low as they are for money coupled with the massive amount of inflation that is headed our way means it's time to buy. $2T dollars was created out of thin air and pumped into the economy - everything is going up, up, up.
Based on the financing of my shop it’ll be 20% down, 20 year term at the longest. Often rates will be higher than you’d see on personal real estate. Also, don’t be surprised if they want to try an adjustable rate in a creative way. They’ll want to renew the loan every few years. They did that with me, or tried anyway. With the way things are going I believe I’d snatch up something already built if it’s close to what you want.
Nice shop for your needs-------------but one thing that people do that ruins a shop, and that one has it but it can be removed. Building a room within a shop space-add that crap onto the outside of the building. It's a total waste of shop floor space. But that's what happens when pinching pennies.
I think this also says it all. If you do not have someone eager to do the job at any price you will probably not be happy with the job even if you can twist someone's arm into doing it. Must be something wrong with the labor and construction market, therefore buying (or renting if something better comes along) a ready place bypasses all that hassle as well.
I'd not want to run to Aberdeen to work on the equipment myself. You could order up a steel building kit and crew up and put it up yourself. I helped a friend do a smaller building, a 40x80. It was a more complete kit for sure, but we got it done. Thickened edge slab with the bolt imbeds, erected with a long reach forklift. I'd go for the extra effort of being able to walk out to the shop in the morning. Aberdeen is a meth hotspot and I'd be thinking about break ins and problems that I'd have to drive down to deal with. Maybe it's better than it was, but when we got the beach property in '08 it was bad.
That is a good setup for what you want, no idea on what the best thing to do is! Not to change the subject but what happened to Tobin and Redeisel, seems like they have been out of there for a while and I haven't seen anything of them since.
Mid last year everyone stopped giving quotes. I heard one building/construction outfit flat out say the quote's were only good for the day it was quoted. Unfortunately it doesn't work out that way because it can't be built on the same day and materials were hard to allocate in advance. Crazy time for building or purchasing. I believe it is still a seller's market. It will change, but no one knows when.
T&R Got bit by the Alaska bug. They were lured up there by SEAlaska with a large advance and have been hurting ever since. Riedesel is back down here now working for RCD timber and Steve Tobin is still up there trying to make a go of it but its not sounding good from all of the guys that have come back. I have one of their shovel operators now.
My only thought when it comes to buying a shop and property---Is the ground clean? No buried tanks, No contamination. the property has a clean bill of health. Because old shops and past businesses have a tendency to hide things like that, banks and loan sharks usually want to know. But once buried and conveniently covered up who is the wiser. It does happen.
good point it also pays to feel out the local govt, find out just how anti business they are
That's what a Phase 1 Environmental report is for. Pretty much any commercial lender will require one. Basically it's a review of deeds, tax records, business licenses, property maps, arial photos, etc of the subject property and the surrounding parcels. If something raises a flag like an oil company, gas station or dry cleaner was located on the site or next door it goes to a Phase 2 which is more involved, usually drilling the site and testing the soil. I've had many PH 1's and 2's conducted over the years. Haven't had one done in over 10 years but back then a PH 1 ran $1,000-1500 and PH 2 varied from $3,000 - 10,000 depending on scope.
I made an offer contingent on it passing phase 1. Now we wait.....
A lot here in town that has a Starbucks on it, went through the phase 1. Two years later another business was going in on the property next door which had to go through the phase 1. They found a 10,000 gallon buried tank that was half on the Starbuck lot. It still had some stove in it and was leaking. Person who owned it years ago----long dead, property sat in limbo for years after he died-taxes.
Hallback how far out are they on Phase 1's? Just curious.
That's a really bad environmental company.. I bet their errors and omissions insurance policy wasn't very happy.
Someone wasn't that's for sure.
No clue on the Phase 1. My offer was a three year lease with early option to purchase if desired. Purchase dependant on Phase 1 environmental check clearing, the wash rack epa permit being renewed and 85% of lease proceeds going towards purchase price.
Is there a oil water separator on the property?
Yessir.
Sellers agent accepted my offer.
Congrats! Are you responsible for repairs to the building and/or property taxes as part of the lease?
Hope it works for you, it certainly looks like a nice facility. With the lease going to the purchase price it certainly takes some of the risk out of it. I'm assuming the sales price of the property is locked in with the lease amount, and not just a "understood" "estimated" amount?
Yes, sales price is locked in. Taxes are sellers responsibility during lease period
Congratulations .You will have some fun Sundays standing around figuring out where your going to put stuff.Looks like a really nice facility,i wouldnt think you would replace it for those numbers. Your proposal was very interesting, ive done similar with equipment ,but never thought of it for land . Look forward to pictures when you get some iron in there .
I figured it was worth a shot. Final paperwork is being drawn up this week. 737 will be going there for work asap.
That's great, glad to hear it worked out. I might try to drop in some time and say hi although I don't get through there much anymore since we quit working for Hancock up there.
Anytime! I heard Brumfield took over the Hancock work?
Nice work.
How long has that property been sitting vacant? Your offer is likely the only movement they have had.
It has been vacant about 13-14 months but it was tied up in tax liens from the old tennant.
Yes, they and a couple other small outfits. We are mostly working for Weyco now, has been going good.
Nothing wrong with that.
congrats @Hallback on getting the deal done.
That's exactly right, never really thought about it, but given the available land, which this building has, definitely add onto the back end there for storage, office, lunchroom, whatever.
Yes, good job! 30 minutes away is just right in my view, close enough you *can* get there pretty quick if there's a good reason, but far enough you won't just idly run over there just to "See how things are going", it's a common affliction. I foresee an inexpensive alarm system with 24/7 monitoring and maybe a drive by security service as well. OR if you have enough shop work, run two or three man swing and grave shifts, does wonders for cutting down invasion by the tweakers and sneakers.
Absolutely correct! I have a baaaaad habit of not leaving work alone. X2 on the security system and I may put up a watchman also.
Looks like it's getting filled up already.
New trucks and a new shop, you are making hard for Junkyard to to stay in the Midwest. LOL Congratulations on the new property, hope it works out for your needs.
All the way up!!
You never really know how much "stuff" you have, until you try to fit it all into a new property. Of course Lanway's "Law of expanding stuff" TM states that: "The amount of stuff you possess will automatically and nearly instantaneously expand to fill whatever amount of new storage space you add." Lanway''s Law of flat surfaces: "Any object in a shop environment possessing a flat top will instantaneously be covered with stuff, even if there are no people in sight, nor any stuff presently available. Removing stuff from the flat surface will be observed to have had no effect upon returning to it." Last one, Lanway's Law of open containers: "Any object forming, by way of an upwards facing opening, an open container is assumed to be a garbage receptacle and will moments after being placed in a shop be found to have somehow received bits of waste and trash, examples are barrels, buckets, pickup beds, engine blocks, hoe buckets, etc."
No wonder i paid 7$ for a 2x4x8 the other day.
And it was probably hemlock at that!
I didn't read this whole thread... I purchased a 36' x 84' 'pole barn' kit with 14' walls. It came with poles, trusses, metal roof, metal siding, screws, and trim. It was $21k delivered in pieces. I was quoted $5k to erect it, but chose to do it myself. https://www.usabetterbarns.com/
With insulation and lighting... yes it has a/c and heat
Surprised your pole shed is only 14' walls. Having a 5 ton overhead crane spanning the entire shop is the probably the greatest asset of the shop Hallback made the deal on. Multiple doors and heavy power is another asset.
My family describes the middle one with having HSD. Horizontal Surface Disease.
Not all of us have really tall stuff to deal with, my current shop has 14' walls and 12' doors, haven't had an issue with that the last ten years. Yes, there are times I wish the hoists had a few extra feet of lift, but that's rare.
I put up a 40x60 pole shed and the standard walls are 16' with a 14' door. A 30x50 had 14' walls and a 12' door. 14' door allows a legal highway height to fit inside. Extra height is nice to have in case you need it.
Obviously true, but then if you don't you're heating a lot of wasted space. YMMV
All depends on what you want to do. Someday I might put a mezzanine in which will work better with taller walls.
That pole building kit was CHEAP!! Where are you located, Cambodia? I couldn't even get multiple quotes as the only guy that gave me one said it changes daily.
Probably changes daily due to those dang logging outfits buying new trucks every week and putting up buildings. Price of lumber cant stay consistent because of them. Last i heard the profit in logging is 700%
Ya, I'm pretty sure it is .701%!!
Nice complex. I'm a big fan of buy it and put it in service RFN making $$$. In the immortal words of the fellow I used to do commercial construction projects for- " I gave you an unlimited budget and you managed to exceed it !!!! "
Should be rolling a Bendpak BP-27 in next weekend.
This! A friend is getting quotes on a new equipment storage building, must pay for material in full the day you say "build it". Builder must also transfer the $ to the supplier the same day. Ed
Out here in fab and manufacturing land those erratic steel prices are playing hell with getting any sales I can tell you. Just one more straw on the old camel.