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COMMERCIAL Real Estate
Commercial real estate- is any property used solely for business-related purposes.
The main categories of commercial real estate include:
- Restaurants
- Retail space
- Hotels and Resorts
- Office Space
- Strip Malls
- Healthcare Facilities
- Industrial I.E. Manufacturing or Warehouses
- Multi-family Properties like apartment buildings
Before beginning your project its always pertinent to have a site plan and renderings of any commercial property your looking to purchase, build or change submitted to the county or city depending on the municipality. Zoning regulations and city ordinances can be very restrictive and maneuvering around them can be time consuming. Getting approval from local municipalities is something most people overlook when considering a commercial real estate investment and can cause serious delays or even terminations and lost time and money. Working with a reputable commercial realtor who knows these ins and outs is vital.
Purchasing and selling commercial real estate is often a complex, lengthy process with many different components. Although every transaction has its own set of challenges, most commercial real estate purchase and sale transactions follow the same process:
- Drafting and negotiating the letter of intent (LOI).
- Drafting and negotiating the purchase and sale agreement.
- Conducting or managing the due diligence investigation.
- Satisfying pre-closing conditions and preparing for closing.
- Closing title.
- Resolving post-closing items.
Utilizing an expert in Commercial real estate is extremly important to help keep your Interest, your time, and your money safe. At Beckett Real Estate we know your time is precious and knowing the in's and out's of these transactions can be tedious and overwhelming. With our professional guidance the sky is the limit. Below is a list of what we will help you with throughout the process.
- Understanding how the value of commercial property is determined
- Recognizing the negotiation process for commercial property sales
- Realizing what “due diligence” involves
- Identifying aspects of legal liability
- Accepting the risks of losing liquidity
- Following the correct process for commercial real estate closings
Establishing the value of residential property is a lot easier than assessing the value of commercial real estate. When you buy a house, you can compare recent selling prices of homes of a similar size in the same or a similar neighborhood. This method might be possible if the commercial property is a shop or office, but other commercial properties can be quite challenging. What if the commercial property doesnt have any comparables? At Beckett Real Estate we have access to independant professional appraisers to help determine the value of the property.
Unlike in residential real estate, in Commercial Real estate does not have the same consumer protection laws that protect buyers if material or laten defects are not disclosed. Which is why its so important to work with a company like Beckett Real Estate who knows what they are doing and can help you identify these problems and liabilities and get them rectified before they become your problem.
When purchasing an existing commercial property, you should receive a complete set of books and records for the property. These documents will contain financial statements for the property, records of any work done, and the existing tenant leases. This information will help you consider the property’s income and physical condition.
Other documents that need to be examined include certificates of occupancy, utility bills, licenses, insurance policies, environmental reports, any risk assessments, fire system inspection reports, parking lot contracts, and elevator maintenance contracts.
Usually, it’s best to get an expert in each field to check the documents, for example an attorney to review leases, title deed and so on, and a business valuation specialist who can assess the long-term viability of existing tenants and/or the financial strengths of the existing business.
Something that should never be overlooked during this time period is the legal liability of the business. It is vital to check that the property doesn’t violate any laws. If it does, the purchaser will assume legal liability with ownership, even if the problem was caused by the actions of a current or previous owner. If a problem is identified, the current owner (seller) must rectify the situation.
Knowing who to work with regarding your commercial property investment is tough and we understand that your time is valuable. At Beckett Real Estate we work with several major real estate investment firms, General contractors and builders and are happy to guide you through the nuances of contracts, facilitating inspections, procuring county records and setting up meetings with county officials to help assist you in your real estate goals. You can rely on our expertise, we are your full service real estate team.
REQUEST A CONSULTATION, GET INFORMATION, OR ASK FOR PROFESSIONAL ADVICE – CALL (678) 615-4033.
