How do horses for courses work in real estate? – Orange County Register

In my formative years in Texarkana, Arkansas, I played a fair amount of golf. You know, I was too slow and skinny to play football and found it difficult to make room under my sneakers – which made basketball a non-runner too.

We didn’t have the cool school sports of today like lacrosse, swimming and volleyball. Who knows? Maybe I would have feasted on them too.

My extracurricular athletic efforts were banished to the golf course. A proverb at that time “horses for courses” became part of my dictionary. It describes how certain golfers do well on certain golf courses while others languish. Jack Nicklaus won six Masters green jackets on a course, while Lee Trevino never won the Augusta National. Strange.

You might be wondering what all of this has to do with commercial real estate? Please allow me, figuratively, while we play a round.

As already described several times in this area, industrial users are either manufacturers, warehouse logisticians or a combination. Think plastic injection molding, aerospace tools, and ramen noodle makers. They all make a product.

Raw materials are received, a process is completed, the finished goods are temporarily stored and then it goes out. Simple.

You may think so. Hmm, are the types of companies higher than manufacturers or warehouse logisticians? Finally, some things like raw materials and finished items are stored and shipped. By definition, you are a manufacturer because something that penetrates – flour, oil and water – comes out differently, for example ramen noodles.

What kind of “course” does this “horse” need in this context in order to be successful?

Certainly a building that is designated for manufacturing and is generally classified as M-1, M-2, light or heavy manufacturing, or industrial park. Where and how (truck or train) do things like flour, oil and water get into the factory, if you look at the specific process as in the case of our ramen employee?

Once inside, are they saved or immediately put into machines? How will the company deal with its layout? We make food. Can a dirty warehouse be enough or do we need a more sterile area?

These large mixers, boilers, and cutters draw many amps of electricity.

Should the finished food be temporarily stored or packed on stationary trucks? As you know, not every “course” is suitable. Critical items include electricity, appropriate zoning, an arrangement conducive to food production, and appropriate entry and exit options. Conveniences such as the height of the warehouse ceilings, fire protection for the stacked goods and huge truck spaces are less important.

Let us now turn to our warehouse logisticians. The easiest to describe is Amazon, the master (sorry!) Of supply chain distribution. All the items that you get from your device, click and buy, simply follow a similar path.

Someone – not Amazon – but like the manufacturers described above, does something. In the case of a Kohler faucet, look to Wisconsin. A Kraus washbasin? China. A head of lettuce? The San Joaquin Valley. Then the gigantic Amazon distribution center brings it to its warehouse by sea container or rail to truck, refrigerated or not. Your online order is received, picked, packaged, wrapped, labeled and delivered to your door. Boom.

I oversimplified the entire supply chain, but you get the idea.

In order to accommodate an Amazon warehouse efficiently, certain functions are absolutely necessary. Clear zoning. Some cities restrict truck traffic. Oops. Can’t go there! Due to the volume of incoming goods, logistics types require a significant number of doors that trucks can unload. What now?

Well, stack it as high inside as you can. You have to think about the stack height and whether the stuff will burn. For example, our Kohler sink doesn’t burn, but our plastic bottles of shampoo do. Therefore, the fire brigade has a say in the fire fighting deployed.

Despite all precautions, an Amazon warehouse in Redlands burned to the ground last year.

Finally – and ideally – different doors that can load the orders onto departing trucks or vans. Less important? Power. Because production machines are not used.

As if the amount of available inventory was not acutely lacking, we now understand why not every “course” fits the “horse”. This only further limits the offer.

Allen C. Buchanan, SIOR, is a Principal at Lee & Associates Commercial Real Estate Services, Orange. He can be reached at [email protected] or 714.564.7104.