Adventures in Commercial Real Estate
Itâs been 6 months since our CSA closed, so I figured itâs time for an update. If youâre newer here, then hereâs the scoop. Back in October 2021 we ran a crowdfunding campaign I called CSA (Community Supported Apparel) to garner community buy-in and financial support to build our own production facility. In 30 days, we raised over $100k that would be used toward buying a building for this small factory weâll be calling The Youniverse, giving us more control and flexibility over our manufacturing in the still choppy wake of pandemic supply chains.
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To be honest, the last 6 months of trying my hand at buying commercial property has been utterly defeating. Weâre all aware that the cost of housing is changing drastically. But you might not have known that this same wild inflation (and extreme lack of inventory) also exists within commercial real estate.
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And while Iâm certainly not giving up, what Iâve learned is that Iâm an average person with an average amount of money trying to play a game thatâs really for the wealthy and well connected. Cash is king, and bank financing is not.
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Missoula, where Youer is based, is a small city (about 80k) and the few surrounding towns are very tiny which means thereâs just not much inventory coming on the market. And when things do appear, theyâre selling instantaneously for wildly over-asking OR theyâre multi-million-dollar properties that are out of my price range. Nothing that Iâm finding is turn-key, and the cost and timeline of construction to modify is a big factor.
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Last April I was under contract on what I thought would be a perfect location, set to close in August. But a disastrous appraisal ended that deal. Since then, Iâve put in a few more offers (all uncomfortably over-asking) and have landed none of them. Iâve looked at bare land, industrial warehouses, historic churches, properties within city limits and locations 50 miles out of town. My wonderful realtor has even shaken loose a few things that werenât on the market to begin with.
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As the Missoula-area becomes more and more attractive (Apple News recently hailed it as âthe next Silicon Valleyâ) Iâm worried that Iâm getting priced out of creating this dream without the help of private investment. While buying is the ultimate goal, renting isnât off the table. But itâs been fairly prohibitive thus far with lease requirements of 3-5 years and monthly rents costing significantly more than mortgages. The recent legalization of recreational cannabis in Montana has led to a much more competitive rental market as dispensaries pop-up on every corner and will pay a premium for space. Itâs a real wild place out there!
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Currently, Youer operates out of a glorified garage â a miniature warehouse (less than 600 sq ft) with no windows thatâs a shared shop with an excavating company. And while theyâre lovely people, trying to do focused work amidst the soothing sounds of welding and dump trucks (oh and itâs right at the end of the runway at the airport) just isnât working for us. Because we canât fit our inventory and our team into 600 sq ft, our team of 3 works in 3 different locations. Our team needs to grow, but I canât begin to make that happen until I know that we have a place to grow in. And when weâre doubling year over year, that place needs to be able to last us a little bit.
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While this is certainly a challenging way to run a business, the purpose of sharing this isnât to complain. Weâre making it work, and weâre doing fine. Mostly. Itâs to tell you whatâs been going on behind the scenes and let you know that the CSA was not for nothing â we WILL be using the funds to do something amazing. Hopefully soon.
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Thereâs also a hope that, by sharing this, *perhaps* someone out there has a space they wish to rent or sell that can give this dream some solid legs. Space is the biggest piece to the puzzle of growth for Youer. We have done significant work planning out how weâll use the space, what weâll make where and what our plans for the future are. But weâre not seeing a great future in our mini windowless warehouse. Â If you, or anyone youâre connected to, know of space that might be cool for us in Missoula or Ravalli county, reach out â Iâd love to chat more. As always, thanks for your continued support of this business that might be small but has huge dreams.
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Mallory
mallory@shopyouer.com
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