Commercial
Real Estate Tips
There are many reasons to get into the
commercial real estate market: setting up a business, expanding an existing one
or new investment opportunities. Commercial real estate may include office
space, retail space, restaurants, agricultural space, rental housing or property
in the hospitality industry. Like any real estate transaction, it’s important
to have the right REALTOR® to guide the buyer through
the process. There can be complicated issues surrounding financing, zoning and
legal paperwork; which a REALTOR®can help decipher. Here are some commercial real estate tips to consider before
entering the market.
Do
Some Homework
Before beginning the search for
properties, be clear about what the needs of the business are. Consider
everything from accessibility and foot traffic to square footage and ceiling
height. Write down a list of must-haves, don’t wants and best-case-scenario
wishes. When planning on construction, renovations or changing the use of the
existing property, understanding the local zoning bylawsand environmental regulations is key. Know in
advance what permits and allowances are required.
Get
Finances in Order
Despite the high cost of buying real
estate, it’s almost always better to buy than be at the mercy of a fickle
landlord. However, make sure the financial health of the company is ready to
take on all potential expenses. Spend the time and money it takes to have an
accountant, knowledgeable in commercial real estate, prepare a well-executed
business plan and financial statement. Plan for any renovations or building
costs. Know the tax implications. Be practical about the company’s financial
forecast. Plan for a rise in interest rates. Budget for general upkeep and
repairs.
Location,
Location, Location
The old saying stands true. The most
popular locations have the best resale value and commercial potential. They can
also be the most expensive with the highest taxes. Look to locations near
popular areas or to neighbourhoods undergoing a transformation. A good
indicator of up-and-coming areas are where the artists are moving to. Small galleries, independent theatres and
indie coffee shops often bring people into an area that may have been
previously overlooked. Have an idea of what kind of clientele the business
needs to attract and where the best neighbourhood is for the type of
enterprise.
Finding
the Right REALTOR®
It’s important that any potential REALTOR®has experience in commercial real estate transactions as well as extended
knowledge of the neighbourhood. Be sure to ask questions about what kind of
expertise they have. A good place to start is the Canadian
Real Estate Association which hosts the Canadian Commercial
Network of commercial real estate specialists.
Don’t overlook real estate agents who primarily
buy and sell homes. Many brokerages offer both commercial and residential
services. If you already have a good relationship with a residential REALTOR®,
ask if they deal in commercial transactions. In Peel Region, the boutique
brokerage, JN Asensio,
is an excellent, family-run business, with excellent reviews.
These commercial real estate tips are a
good place to start. However, always speak to a business professional who will
give good solid advice. While starting or expanding a business can be exciting,
being prepared and informed will take the risk out of the equation.