Commercial Real Estate as a whole is a whole different ball game than the purchase and sale of a home. Entrepreneurs are often ready to move forward with the sale without checking for a few key components that could lead to detrimental mistakes for their business. While there are dozens of different factors to consider such as what maintenance issues will need attention to either build or maintain your building, what demographics and other market features will change, what funds and materials you will need to have immediately available to get started, etc. There are a few key things to understand and be aware of when purchasing commercial real estate.
Know your worth- Pending on the size of the potential sale, you may have lawyers, commercial real estate experts, bankers and more who are there to dig into every detail of the sale and ensure that there are no hiccups that will arise in the selling process. Unfortunately, this isn’t always the case, if you are just starting a business you might be going in alone. Know what your business is worth and make sure to ask yourself why this space may be available, what happened to the last business that was here? Look into the amount of foot traffic and visibility from automotive traffic to ensure you will be getting the maximum amount of “free” marketing due to easy visibility. Do some digging and make sure the value of your business is worth opening in the available storefront.
For Sale-Often the space that is available could be sold by the previous owner, if this is the case be sure to ask why they are interested in selling, while not being pushy, this question should be answered solidly. This isn’t always bad, for instance, the prior business could have grown to the point of needing to expand therefore leaving the space available, the flip side is that the business plan could have gone under and the location could be part of the reason. Make sure to be educated on why the space you are interested in is available so you can make a conscious decision going forward with your purchase.
Take Over-If you are purchasing commercial real estate that is already an existing business, your questions and concerns may be much different that those of an empty storefront purchase. A huge thing to look at and inspect is the amount of inventory that will be left for you to take over upon your purchase. Make sure you aren’t paying for inventory that could be used before you get the keys and take over. Of course, if you are uncomfortable with anything during the business takeover, consult a professional before signing a contract.
In any and all situations there are many different factors that go into both selling and purchasing space for commercial real estate. Whether you are ready to list space of your own or are ready to begin your search for the perfect storefront or building, education is key. Ask questions, get answers and enjoy the journey.