Commercial real estate space runs the gamut of variety from a small retail space all the way to a large high-rise commercial building. Whether your company is growing and requires more space, or you are embarking on a new business endeavor – finding the perfect location is critical. This buyer’s guide to CRE will look at the steps needed to purchase commercial real estate successfully.
Size Matters in CRE
You’ll want to have a general idea of the office space, warehouse, or facility you seek. Medical groups often require a building that is easily divisible into patient rooms and can handle significant growth to accommodate both patients and providers. A technology-focused company needs a large state-of-the-art facility to tackle development, a growing workforce, and research.
When shopping for CRE, think about the company’s current size and then try to leave room for future expansion and development. Usually, commercial property is divided into categories: office space, hospitality, industrial, retail, or multifamily properties.
Commercial Office Space
Commercial office space is categorized as class A, B, or C.
- Class A: Higher-end properties that have undergone recent updates.
- Class B: Requires renovation after purchase.
- Class C: Older buildings (usually 20+ years) that need updating or maintenance.
Industrial Commercial Space
Industrial space is used for factories, warehouses, plants, and other areas that often manufacture or distribute products.
Retail Commercial Space
Areas used for retail businesses that sell products and services. These can be huge such as a shopping mall, or they can be a single small storefront.
Hospitality Commercial Real Estate
Locations such as hotels, motels, or other short-term rentals.
These are residential properties that have five or more dwellings which makes them complexes or apartment buildings.
Components of Purchasing Commercial Property
Let’s examine the three significant components of purchasing CRE.
Before negotiations, all funding should be worked out. A business must think about its liquidity and financing options to ensure adequate capital for unexpected expenses. All loan options should be worked out so that a company has a clear picture of exactly what type of commercial space they can afford.
Purpose of Property
Figure out the business model to get an idea of what property best fits before making a purchase. Some buyers might find a building that needs modifications but will still fit the business’s needs due to other factors such as location, size, or room for expansion.
Choosing a Broker for Purchasing CRE
A qualified broker will answer all questions. They should know the current trends and market. In addition, they should be familiar with the location to offer insight into what best fits their client’s goals. A qualified broker always has in-depth knowledge of the area’s demographics. Remember, the broker will negotiate the agreement to get the best deal.
Buying CRE is an exciting step for any business owner. Following the steps in the CRE buyer’s guide can help ensure that you secure a suitable property.
If you are seeking a qualified commercial real estate broker, please contact RE/MAX Top Producers Commercial – a full-service California brokerage for more information.