In many ways, to buy commercial real estate is to make a personal investment in a generally profitable industry. Whether you are choosing to buy commercial real estate to house your own business or to lease out to other tenants, there are some important things to consider first.
If you are preparing to purchase a new commercial space, CTG Real Estate Services can provide all of the guidance and information you need. Buying commercial real estate is about more than finding the perfect space. It’s about what comes after a signed bill of sale, too. While other real estate companies will only assist through a signed contract, our company will make sure you have the management set in place to successfully operate your new space, as well.
So, what should commercial real estate buyers know before starting their search? You can always schedule a consult with our CEO and founder Chris Gardner for personalized information, but you can also find some of the basics of purchasing commercial real estate here.
What to Know Before Purchasing Commercial Real Estate
If you are considering buying commercial real estate, you likely have one of two goals:
- You wish to buy commercial real estate spaces to renovate and lease out to tenants in order to turn a profit.
- You wish to buy a commercial real estate space to house your business (and lease any leftover spaces to other tenants).
Which goal you have will determine exactly how to purchase the commercial real estate that is best for you.
First, know that commercial real estate is a fairly profitable industry that is expected to show continued growth in the years to come. Commercial spaces tend to be more expensive than residential spaces; their value is determined by usable square footage. Anyone considering buying commercial real estate will need to be prepared to place a larger down payment than they would with residential real estate — usually 30 percent or more. Financial lenders and real estate companies you use will require an extensive proof of funds (POF) before you can move forward.
Before purchasing commercial real estate, always do diligent research into all the aspects of creating a successful commercial space, whether your goal is to use the space yourself or lease it to tenants. Only after you are aware of and comfortable with these responsibilities should you begin your search for a space.
How to Purchase Commercial Real Estate
It can be difficult to know where to start when buying commercial real estate. To find the best path for you, ask yourself these questions:
1. Am I buying a building to house my business or to lease to other tenants?
Those who are seeking a building for their own business will have different priorities that those who are looking to buy to lease out to others. A building for your specific business must have specific qualities, which you know best. These will determine your asset criteria moving forward (more on that below).
If you are looking to buy a space to lease, you will still need to consider the qualities that will best attract the businesses you want, but they may not be as high a priority as someone looking for a space for their own business.
2. What are my asset criteria?
When buying commercial real estate, you need to identify what aspects you desire in a potential space — for yourself if you have plans for your business to reside there, or for prospective tenants you wish to lease to. Determining your asset criteria will help real estate companies find the perfect space for you.
Ask yourself these questions:
- What is my desired location and market?
- If leasing out space, who are my desired tenants and what is my desired lease rate?
- What kind of current amenities and possible amenities do I want?
- What kind of renovations am I comfortable doing? What class of building do I want to buy?
- What is my budget for purchasing and renovations?
- When do I plan to move my business or tenants into my building?
While real estate companies will discuss your asset criteria in more depth when you start working with them, you need to identify your basic goals and needs prior to contacting a real estate professional.
3. Do I want to work with a real estate company or buy commercial real estate on my own?
Buying commercial real estate involves many aspects to create a productive space for your business or your potential clients. Your journey will not end once your building purchase is complete; you will need to consider facility management, property management, maintenance and repair services and more to create a functional space for your business and/or tenants.
A real estate professional like CTG Real Estate Services can guide you through these processes from start to finish. Otherwise, should you choose to handle these services by yourself, you may be forced to pay additional expenses and take additional time with these personal responsibilities.
How CTG Real Estate Services Can Help
Having difficulty answering these questions? The professionals at CTG Real Estate Services can always help, but we also recommend you do as much research as possible before choosing to move forward with purchasing commercial real estate.
When you are ready to buy commercial real estate for your business or for leasing purposes, CTG Real Estate Services can guide you through every step with our unique turnkey solutions. Our team doesn’t walk away once sales contract is finalized; we are available to explain all the other details necessary in establishing and managing a successful, productive commercial space. We will work closely with you to create the perfect design for your business’s needs and help you put the services in place to guarantee smooth sailing ahead.
To learn more about how we can assist you in buying commercial real estate, please contact our professionals today.