In many ways, purchasing commercial real estate will require a lot more involvement from you than if you were just buying a home or other residential property. Whether you are buying with the intent to build on the property or to use an existing building, you as the owner are held liable for all factors involving the safety of the property. You also will want to make sure you know exactly what the property will be giving you, good and bad. Here are some essential tips that can help you be discerning in your purchase and be a responsible property owner.
Consider Your Location
The commercial real estate industry covers a broad range of properties from small retail shops to large industrial complexes. Even apartment complexes can fall under the commercial real estate heading, depending on the size and type of business you have. The first step in purchasing this kind of property is to think about your business and evaluate the location of the property based on those needs. If you’re investing in a store or restaurant, what is the surrounding area like? Does it have a lot of potential clients or possible competition? For an office building, consider who lives in the area and what the commute to that location will be like for your ideal employee demographic. Everything from your immediate neighbors, nearby amenities, all the way to who lives in the surrounding cities will affect your business and its success.
Get an ESA Report
An environmental site assessment report is an essential part of buying any commercial real estate. Phase 1 ESA reports typically include information about any potential or current liabilities with the location or the building itself. These Phase 1 ESA inspections can be helpful for new buyers wondering what kinds of risks they might face. Not only are they helpful, however, but they are also required by law. If there is anything hazardous or otherwise unlawful on your property, whether you are aware of it or not, you are held liable for it and the property must at some point have been given a Phase 1 ESA inspection. You can get Phase II reports that go deeper into this process based on any findings in the first phase report. While some previous ESA reports might be available, new ones are often filed when a deed changes hands. This ensures that you are not held responsible for anything the previous owner may have failed to disclose or failed to maintain on the property.
Check Utility Connections
Your new property will need to have all basic utilities hooked up to function properly. The location you choose, the type of building on the site, its condition, and its proximity to utility lines can all have an impact on the existing utility connections available. You may need to check for any current connections and take steps to set up the ones you need before you can move things into an operational state. Plumbing and electricity are the two main essential lines that you will want to have connected. Phone cables should also be included if you intend to use any landline connections. If you are using a pre-existing building, be sure to ask about any existing Ethernet connections, outlets, old and new electrical wiring, and ventilation systems.
Consulting the Experts
When you are owning and operating a business, no matter what size, you can’t afford to make mistakes in choosing a property location. That is why it is prudent to seek the help and guidance of professionals such as commercial Realtors, market analysis agents, and lawyers to ensure that you are making the best choices for the health and longevity of your company. You can also speak to business owners in the area for advice on the property and on what services they suggest. Small business owners and entrepreneurs are often eager to help newcomers get on their feet, and building relationships with established local businesses will be valuable to your success and growth.
Buying commercial property is a major investment, but it doesn’t have to be a dangerous one if you take the proper steps. Take your time and be discerning in your evaluations of property. Be aware of how it and the area around it will affect the success of your business. Careful evaluation and seeking the proper counsel will be a great benefit to your investment in a commercial property.