Scouting reports on relocation from Fairfield County real estate pros find in-county options becoming popular with awareness of alternatives key to survival.
According to Jim Randle, president of RAND Real Estate Services in Westport, non-real estate businesses that own their own facilities should be taking action with their location compared with options they investigated only a few years ago.
“Real estate is an illiquid asset,” said Randel. “In this environment, cash is key.”
Randel said holding on to anything that is illiquid could create problems for a business.
“Whereas two or three year ago owning your own property might have been considered an asset or a plus, now it”™s a concern,” said Randel.
Randel said that although it”™s not a seller”™s market right now businesses in this position do have options.
Renee Carnes-Rook, vice president of real estate services at Cartus, a workforce management service, said as the global economy remains unsteady, the effects of the credit crunch and rising inflation have placed excessive pressure on corporations to keep business costs, such as relocation programs, to a minimum.
“A good, smart company, who”™s not necessarily looking to downsize could do what”™s called a leaseback,” said Randel.
A leaseback is an arrangement in which one party sells a property to a buyer and the buyer immediately leases the property back to the seller, allowing the initial buyer to make full use of the asset while not having capital tied up in the asset.
“In some ways it”™s a financing type deal,” said Randel. “The company can turn it into cash and commit to rent it back for, say, five years.
Randel said it creates a safe a smart situation and also allows the business that may otherwise have had to move to create cash and not have to spend on relocation costs.
 “Liquidity is important, especially for smaller businesses because especially now it”™s harder for them to borrow money,” said Randel. “For small- to medium-size businesses it doesn”™t make any sense to own any liquid asset.”
Randel said, for those businesses that are looking to sell their locations outright, it”™s a great time to be in the tenant market.
“There”™s a lot of opportunity out there,” said Randel.
Randel said in relocations in the small- to medium-sized business market have seen movement, but mostly within Fairfield County, with farther relocations on hold for various economic reasons, such as the flooded job market, as well as the usual reasons, such as company principals living nearby.
According to a 2009 survey on domestic relocation policies by Cartus, more than 75 percent of respondents cited an increase in employee resistance to relocate because of the economy, and 50 percent expect talent management challenges to increase over the next year.
“Now is a good time for relocation managers to re-examine workforce policies and strategies to increase cost savings,” said Carnes-Rook.
