Six important things to consider while purchasing commercial real estate

Location is the main factor that decides the value of a property, whether commercial or residential. There are a few other major factors too that raise or lower the value of a property. These factors should be given a close scrutiny before finalising the purchase of commercial real estate. One cannot afford to realise too late in the day that taking the property on lease would have been more sensible than purchasing it, especially when resale could turn out to be difficult for the same reasons. The following is a basic list that one may check out before purchasing any commercial real estate.

• Location: The location of the property is important not only as regards whether it is in a prime area, but whether it is conveniently accessible also to customers, clients and other associated people who are likely to frequent the place.
• Parking space: Does the property have enough parking area for the number of vehicles that are expected to need parking facility generally on an average.
• Physical state of the property: One has to find out how good or bad exactly is the physical condition of the property and whether the price quoted would be justifiable. One also has to make sure that the unavoidable repairs and expected renovations are possible on the property both in terms of practicality and legality.
• Utility of space: Consider the space available and whether it would suit the nature of one’s business. One also has to make sure that a reasonable amount of changes would make it suitable for one’s business. The amount of time and money that would be invested in making the changes should also be taken into account while inspecting the space.
• Potential for expansion: If the business has immediate scope for expansion, the property should also have the same to accommodate the changes that accompany the expansion.

Lease value of the property: Last but not at all the least, consider the net lease value of the property. This is relevant in the event of one’s deciding not to expand the business for the time being, in which case the extra space may be leased out. Having an insight into the current and future lease values will also be helpful in determining what would make more sense – to take the property on lease or to buy it.


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