On the surface, it may seem as though the commercial real estate (often abbreviated as CRE) business is an easy one. Decide what you’re looking for, scout it out, and then purchase it or sign a lease. No big deal - just another do-it-yourself job. How difficult can it be? Navigating the entire process the right way is a lot tougher than it appears. If you’re looking into purchasing or leasing real estate for your new business or as an investment, here are a few steps to help you find the best deals.
Technology is a Great Resource for Commercial Property Search
New technology - it can make your life so much easier. Thanks to the internet, you can find and analyze deals from your couch, allowing you to view many more properties than ever before. But staying on top of all the new technology available isn’t always a walk in the park, especially if it isn’t your area of expertise. Every day it gets easier for just anyone to go online and search for properties with the different characteristics they might be looking for, but it’s important to keep in mind that, with technological advances come people who are able to manipulate those advances. I’ve seen brokers and owners market locations that aren’t available so they can drum up more leads for other properties. This intentionally misleads prospects – and that’s just the beginning!
What you see may not always be what you get. If you don’t know the ins and outs of the commercial real estate business, you may find yourself in a deal that isn’t at all what it appears to be. Although the internet has made your search more convenient, I strongly recommend that you always view a property in person before making an offer – you never know the true condition of the space (since pictures sometimes lie!) and what could be next door, adversely affecting the property’s value. It seems like a no-brainer, but you’d be surprised at how many business owners, especially if they’re moving from out of state, will do this!
Trends In Commercial Real Estate
As an entrepreneur anxious to start a new business or expand your current operations, it may be tempting to get caught up in the trends that are occurring in the real estate business. The right city, the right neighborhood, the right look - all of these things can be fashionable at certain times, but does that mean it’s right for your new business? Don’t feel like you need to be in a certain area simply because that’s where everyone is going. These developments tend to have a much higher price point due to their demand, and you may not need to spend that much money if it will only marginally increase your revenue.
It’s important to understand that just because something is working for one business, doesn’t mean it’s right for yours. Keep in mind, too, that you need to forecast the future of the area you’re looking and understand what’s coming down the pipe. If the city is planning on adding a greenway or closing two lanes on a five-lane road, it will impact your business!
Real Estate Lingo
As with any profession, real estate has its own language – and, unfortunately, many in the industry tend to forget that others may not understand these terms and phrases. It’s important to educate yourself in this arena because this could impact your knowledge of the deal. You can find a list of the most common CRE terms here. Commercial real estate agents know how to communicate with their clientele, whether you’re looking to buy/sell or lease, to ensure that you fully understand the investment you’re making. Someone who does not understand the language of CRE will have a hard time finding and negotiating the appropriate deal.
Real Estate Transactions
Real estate, perhaps more than many industries, is full of transactions. You’ll be dealing with “discovery, property search, prospecting, workflow, verification, and tracking, just to name a few of the transactions that will take place. It’s a big job for someone who knows what they’re doing; for someone who doesn’t, it would be very easy to let some vital transaction slip through the cracks. You’ve seen how much of the process your residential realtor handled when you bought your home, and that was just a residential house! When you’re making an investment that could either kick start or kill your business’ success, you have to know everything about the property. You don’t want to find out two years down the road that there’s an environmental issue and now you have to spend hundreds (yes, hundreds) of thousands of dollars to fix your situation. We put the commercial real estate process in an easy to navigate, eight-step info graphic that you can view here.
Help is Out There
If you are starting a new venture or looking to expand your current operations, you should keep your focus on building and running your business. Go to someone you can trust to help you with the renting or buying of the facilities needed to house your new industry, someone that knows that language, understands the technology, and can sift through the trends and transactions to determine what’s right for you. If you are looking for property in Nashville or Middle Tennessee, call Tyler at Vastland Realty at 615-574-8060. He has the experience, the know-how, and the connections to get you the ideal property. Leave the property worries to Tyler, and focus all your energy on making your new enterprise a success.