Dealing with commercial real estate can be quite complicated, even for those with experience in the business. There are always many variables to consider, and it's important to dot every "I" and cross every "T", or you may find many unintended consequences down the road. Here are some things you want to keep in mind when going into a commercial property transaction:
Think about your future, not just your present
Whether you're a business looking for industrial property, a retail location, or commercial office space, you need to approach the deal with not just your present needs in mind, but your future needs as well. What is your five year and ten year growth plan? In other words, where do you believe your business will be 10 years from now? And make sure these projections are realistic and based on sound data and not wishful thinking. Otherwise, you may overcommit and take on more space than you need or can afford.
Get your financing together ahead of time
Financing a commercial real estate transaction is far more complicated than just getting a residential home loan. Depending on the amount of the purchase, you may need to line up multiple sources of financing. Make sure you do all this before you start looking around for the ideal property. And remember, sometimes private investors can be the best sources for funds to buy or construct a commercial property. Use your network of contacts and consider all possible sources, so you have all your ducks in a row before you even get close to negotiating a deal.
Address any and all environmental concerns
This is especially important when going into industrial property, but it can even come up when looking at property such as commercial office space. Make sure you or someone on your team has thoroughly researched all the government zoning and environmental regulations and the cost of compliance. This is one area where you want to avoid future surprises. Make sure your due diligence is done in this area.
Educate yourself on taxes
Whenever you enter into any kind of commercial real estate transaction, taxes must always be a major consideration. Many times, the tax laws will work in your favor in the form of depreciation and other kinds of deductions you'll be allowed to take. Whatever the case, make sure you review everything with your accountant so you know the impact taxes will have on your purchase.
Work with a top-tier commercial realtor
This may be the most important consideration of them all. Whether you're new or experienced in the commercial market, make sure you have a commercial real estate broker representing you that knows what they're doing. It is best to find a realtor with several years and millions of dollars of transactions under his/her belt. It is also helpful to ask for some references from others who've worked with this realtor to make sure they had a good experience. With a top commercial real estate agent on your side, you are far more likely to have a smooth and successful transaction.