5 Questions You Need To Consider Ahead Of A CRE Transaction
Everything you need to know to protect your investment decision.
3.5 min read
The current economic climate suggests that the demand for commercial properties will only continue to rise. Purchasing commercial real estate can be an intimidating feat, especially if it is your first time. Knowing the right questions to ask your commercial real estate agent will not only give you a better understanding of the property at hand but will set you up for success for future purchases.
If you’re looking to invest in commercial real estate, you’ve come to the right place. We’re sharing five essential questions you need to consider when purchasing commercial real estate.
1. How long has the property been on the market?
Commercial properties tend to stay on the market longer than residential properties do, given the nature of the business. However, if a property has been on the market for longer than usual, it might cause concern. When considering purchasing a property, make sure to research how long it generally takes comparable of that nature to sell for in the area. If longer than average, you may want to consider speaking with the seller.
2. Is the property in the right location?
Location is vital when purchasing a commercial property. Whether you are looking to acquire an office, retail or industrial space, the surrounding amenities and neighbourhood can play a crucial role in whether that property is desirable or not. Certain aspects of an area that may not be suitable for residential properties can make all the difference in driving ROI on your commercial investment.
3. Is there any future development taking place nearby?
Nearby developments can either make or break the location of a commercial real estate property. Your agent needs to do adequate research on up-and-coming and well future developments that are taking place nearby. If the development has a chance of hindering your ROI, it may be best to look elsewhere.
4. Are there any issues with the property?
Before signing on the dotted line, it is in your own best interest to thoroughly inspect all aspects of the property, including the seller, financing, and compliance obligations. Doing this will reduce and mitigate uncertainties if and when your client acquires the property. It can include anything from a building condition assessment, a title search, a survey, any significant expenditures on the property and other related records.
5. Does it fit my business goals?
A property may look desirable at first glance, but it may not be the right fit for you if it does not align with your business goals. Always consider all aspects of the investment and whether it will work for you now and in the future. You could save yourself year’s worth of headaches If you do.
Knowing which questions to ask when investing in commercial real estate will help you get the information you need to make the right purchase decision.
Reference
Important Questions to Ask When Purchasing Commercial Real Estate. (2019, June 18). [web log]. https://bermontrealty.com/blog.html/important-questions-to-ask-when-purchasing-commercial-real-estate-6370009.
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