Edwards: Brokers Crucial When Buying Land

NEWPORT BEACH, CA-Acquiring land for development is extremely popular and extremely difficult on the West Coast, particularly in supply-constrained regions like California. As GlobeSt.com reported last week, Western Realco purchased a 19.51-acre industrial site on Saturn St. in Brea for an undisclosed price and plans to develop 365,000 square feet of class-A industrial buildings on the site. GlobeSt.com recently caught up with principal Gary Edwards to discuss the firm's strategies for purchasing land for development and other trends in industrial development.

GlobeSt.com: The Brea parcel your firm just purchased is pretty sizeable. What strategies do you use to find and purchase land for development in such a constrained market?

Edwards: Given that almost every property of any size or consequence is brought to the market by a commercial brokerage firm, Western Realco's lifeblood is the commercial brokerage community. We have spent, and continue to spend, a considerable amount of time with brokers in the various submarkets discussing our track record, our equity partners and our acquisition criteria. While every opportunity in today's market is highly contested, the sellers still look to the brokers for guidance on a particular buyer and their reputation for performance once under the escrow contract. We believe Western Realco has established a reputation for performance second to none, as well as being a buyer that a seller can work with in getting the transaction completed.

GlobeSt.com: Aside from big boxes getting bigger, what other trends are you noticing in industrial development?

G.E.: While the bigger-is-better philosophy definitely seems to be holding true out in the Inland Empire, we have found in the infill markets that there is still significant demand for the smaller and mid-sized product, both from regional operators as well as national companies. We are seeing demand in all building sizes for higher clear heights, and there continues to be upward pricing pressure on the newer product vs. the second-generation space.

GlobeSt.com: Do you see a strong market for industrial redevelopment emerging?

G.E.: Yes, we've been active in that arena and see no reason for the demand to abate. There is significant capital that needs and wants to be placed in Southern California real estate, and this will continue to fuel the repositioning of older assets.

GlobeSt.com: What other advice can you give to those who seek to purchase land in supply-constrained markets like Orange County?

G.E.: It's all about the brokers …