Whether you’re leasing or purchasing a property for your business or purchasing a commercial investment property, there are many factors to consider. Purchasing a home can be an intimidating process, but finding a space for your business is another usually very complex process. Not only are commercial leases and purchase negotiations more detailed, but there’s often much more at stake. For these reasons and more, it’s usually best to work with a commercial real estate broker.
1. Market Knowledge
A commercial investment broker will be able to educate you on leasing and buying within your local market. Not only have they likely completed extensive market analysis, but they also have experience in the commercial real estate industry. There are certain things that a business owner may not realize about a market such as the local demographics, local zoning and municipal regulations, or pending changes to city infrastructure (such as planned public transit systems or road and highway improvements). All of this market knowledge will tie directly into the success and health of a business and its use or investment in real estate.
2. Finding the Best Fit
Because commercial real estate brokers work closely within their markets, they’re aware of the opportunities that are available for your business. A good broker will be aware of developments that are perfect for your business or may have leads on listings that are not currently available to the public. Commercial real estate brokers also know enough about the businesses in their area to identify potential pitfalls for your business, such as not having enough traffic/visibility, having insufficient parking, or inappropriate zoning for your needs.
3. Negotiating On Your Behalf
Commercial real estate negotiations are often quite extensive. For leases, negotiations involve build-outs and construction, longer lease terms, free rent considerations (rent abatement), and personal guarantees. For sales, negotiations always involve price and competition; supply and demand. What are the comps in the area selling for and how does that compare to the financial pro-forma for your investment? While some things you may realize, not only do you need to be aware of your company’s needs, but you also need to “know what to know.” A real estate agent will know to look at a building’s capital components and mechanical systems: plumbing, roof, electrical, and HVAC systems and potentially negotiate for repairs and capital improvement credits, while a first-time business owner may not think about these details.
4. Simplifying the Process
By working with a commercial real estate agent, you can have a single point of contact for all of your commercial property needs. Everything is handled for you, ranging from finding property options, scheduling tours and negotiating on your behalf with your attorney and team. Consequently, you can focus on what’s important — your business.
Apart from the above, working with a commercial real estate broker gives peace of mind. By being represented by a professional, you can rest assured that your needs are being taken care of and that nothing is missed.
For more information (and to get started on your next commercial property) follow Jim Conrad, CCIM, on Facebook or contact us to get started. Jim is the Managing Broker of McLennan Commercial Properties in Park Ridge, Illinois, and is the owner of multiple investment buildings. Jim has extensive experience in real estate analysis and consulting including owner’s representation and disposition consulting along with tenant and buyer representation.