The main source of concern for developers during this third stage is the

The main source of concern for developers during this

This preview shows page 22 - 23 out of 23 pages.

the project over time. The main source of concern for developers during this third stage is the "residuals"-the future proceeds from the sale of buildings developed and any remaining unsold parcels. The developer plays the same role in the association as other owners: if they own buildings with triple net leases, they should inspect the property at least semiannually. These inspections are important for determining: how well the building is maintained; problems of functional obsolescence; the existence of restricted activities, such as the stor- age or manufacture of items outside buildings; the existence of potential problems or liabilities resulting from toxic waste; and the health and well-being of tenants and whether their operations are growing, maturing, or diminishing. Various new concerns also bedevil the owners of in- dustrial properties. For instance, in earthquake-prone areas, masonry property built before 1934 must be rein- forced with steel. Dealing with tax reappraisals on existing property and trying to work out mistakes on tax bills can consume enormous amounts of an owner's time. Leaking oil tanks on properties several hundred yards away can contaminate groundwater, making it difficult to refinance nearby properties. Defense contractors insist on four- month escape clauses from leases because they do not know whether their contracts with the federal govern- ment will be extended. All such concerns demand de- velopers' increasing attention during the operating phase of a project. Property management for an industrial development varies considerably depending on the building type and whether it is single tenant or multi tenant. Covenants play an extremely important role for maintaining a high- quality appearance. Rules with respect to on-site storage, parking, and truck parking and loading areas are just as important as landscape maintenance and trash pickup. Truck parking in older industrial areas can create serious problems, especially if residences are nearby and the trucks impede traffic flow. If loading bays face the street, longer trucks may protrude into the street. This condi- tion will cause continuing headaches for the owner who must contend with constant complaints from neighbors and parking tickets. Many single-tenant buildings have triple net leases that have no provisions for an on-site property manager. Even though a lease provides for cleaning up the property and properly disposing of hazardous wastes and other sources of contamination, the owner should inspect the property regularly to ensure clean and safe storage practices. Selling the Project The disposition of industrial properties follows a proce- dure similar to that for office and retail buildings. The developer can emphasize a number offeatures to po- tential buyers: the building's functionality; the building's adaptability; the site's locational attributes; tenants' reliability and financial strength; the project's financial characteristics; and the project's future prospects.
Image of page 22
Image of page 23

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture