You have the business plan, talked to a mortgage representative, everything appears to be a go. Now for the perfect location and building. If you’re going to invest your hard-earned dollars into purchasing a commercial property, you want to make sure you’re making the right choice. There are many things you need to consider as part of your selection process. Here are 10 things to look out for when buying commercial property to help make the process a painless one, and to ensure you find the best property to suit your needs…
1. Location, Location, Location
It almost goes without saying, but location is the number one criterion for buying commercial property. Priorities will vary according to which industry you’re in but consider things such as the distance from the demographics you wish to attract – whether manufacturing, office, restaurant, etc. go where your clients/customers are located. If you’re looking for demographic information the internet and local city halls are a wealth of knowledge. One very good site in Delaware is https://delaware.hometownlocator.com/census/sorted-demographics.cfm
Parking is so very important. Your employees need easy access to parking and so do your customers. Depending on your industry, you’re likely to also need adequate sufficient space for incoming and outgoing freight.
It’s important to check out the zoning around the property you’re inspecting, to ensure it matches up with your intended usage. In Delaware, it is best to contact the Planning and Zoning Division in the county you are interested in doing business. We always recommend you consult with the city/town administrator to ensure your intended usage is adequate and what permits you might need before making an offer to purchase.
Are you looking to purchase an investment property? When it comes to leasing, we’re finding properties containing a higher proportion of yard space are highly sought after compared to properties with little or no yard space. These properties may be difficult to find due to modern developers maximizing the building area for their new developments.
5. Opportunity for future expansion
A commercial property may meet the needs of your business today, but what about tomorrow? Looking at the potential opportunities for expansion of the property is an important consideration as part of the purchase process.
6. Energy efficiency & environmental factors
With rising utility expenses, energy efficiency and running costs have become an even more important aspect of the modern business world. Is there an opportunity to add solar panels to increase energy efficiency? Where will you be accessing your water from? Are emissions or sound restrictions an issue? Depending on the type of business, there could be other environmental factors to consider.
7. Due diligence
Of course, due diligence is required in the purchase of any property, and you can make your purchase proposal/offer subject to satisfactory due diligence. Arrange a building inspection by a qualified expert to identify any defects or potential issues for you that could cause grief down the track. Ensure all town and county building approvals have been obtained, check out the wiring and any electrical issues, and ensure no hazardous materials are on-site. You should also check drainage and sewerage diagrams, fire safety issues (if any) and investigate if any heritage or building restrictions apply to the property. If you have reason to believe the property may have contamination issues, then it’s also worthwhile to obtain an environmental/contamination report.
8. Major projects happening in the area
Check to see what’s happening in the area around the premises. Are there other developments happening? What about any new community infrastructure being built? New major projects in the area can be an indicator of economic growth, which may be a positive for your business. If you’re looking for an investment property, we are finding that developed areas usually lease much more quickly. They also typically demand higher rent returns compared to undeveloped areas.
9. Inclusions in the purchase price
Ensure you’re aware of all things included (and excluded) from the purchase price. Is there any commercial furniture or industrial equipment included? If not, have you factored this into your budget?
10. Current use of the property
Is the property currently leased? What agreements are in place? What is the plan for the tenants once you purchase the property? If you’re purchasing the property as a tenanted investment and there’s a current lease in place, be sure to check the current lease terms, as well as rental lease options and increases, and market reviews.
If you’re in the market for commercial or industrial real estate, we highly recommend you speak with a real estate agent that specializes in the field. The Commercial Moving Experience works exclusively in commercial property services. We can help you to find that retail shop, office space, bulky goods showroom, display yard or industrial property, that you’ve been looking for. Contact us at 302.241.0899, or you can check out the properties currently available on our website: https://themovingexperiencede.com/commercial/. We are here to help you whether you are just exploring or ready to make the commitment.