Commercial real estate is property used solely for business purposes. Encompassing several categories, it includes offices, retail spaces, shopping plaza, warehouse, hotel, manufacturing, factory, and multi-family dwellings such as apartment buildings, high-rises, duplexes, garden apartments among others.
The owner expects to make a certain return on the investment. For commercial loans, the lender may consider the business’s ability to make money in determining how much the borrower can borrow. Commercial loans normally require at least a 20% down payment with term around 10 years.
In most cases, business owners lease a property from an investor rather than purchase the property for themselves. Whether you are the lessee or the lessor, you should understand the basics of commercial leases. There are no standardized forms for commercial leases, but in most cases a commercial lease will include the following:
- The length of the lease. This could be a year, five years, ten years, or longer.
- How much you owe as a security deposit.
- Your monthly lease payments. The lessor may require that you pay a portion of your business’ profits. Others require that you pay a portion or even all of your operating costs.
- Other details about the property. For example, there may be a clause indicating what type of signage you’re allowed to use.
- Information about competitors. The lessor may agree not to lease space in the same building to any businesses that are similar to yours.
When you’re looking for a commercial space to lease for your business, there are many factors you must take into consideration.
One of the primary things to consider is the neighborhood:
- Is there enough traffic in the area to give your business the desired visibility?
- Will there be enough parking for your customers?
- Do people who live near there have a need for your business?
Zoning laws may also influence where you choose to set up your business. These laws dictate how property in a certain area can be used.
Your property must be located in a commercial zone in order to operate your business. This means that the city has given permission for businesses to operate in that area.
The particular laws in your area will list for what purposes you are permitted to use the property for, including what kinds of construction or renovations you can make to the property.
Below are some examples of properties we have represented or participated in the sale.
