I'm a small business owner who needs to expand my office size. I need
to relocate to a larger office with specific improvements that will enhance
my business' bottom line. How can a small business owner find out about
commercial space available for rent or purchase for a specific locality?
Effective, commercial real estate research consists of accessing
the multiple listing service (MLS) for residential and commercial listings,
LoopNet for local commercial listings,
commercial listings in local newspapers, contacting commercial listing brokers
regarding local inventories, and/or performing commercial market value analyses
on comparable commercial listings for a particular area.
Whether a business owner is in the market for purchasing a commercial building,
or space, or
leasing space in a building, specific
advantages
and disadvantages can be applied to each transaction.
Obviously, owning a building outright provides the business owner several advantages
over the business owner who just needs to rent a space. Some of the advantages
of owning a commercial property include full tax write-offs, leasing out other
offices, more control of property, building equity, prestige of ownership, and
so on.
Some of the disadvantages of owning a commercial building include liability
and responsibility of upkeep, property management of sub-leases, depreciation
(maintenance), and so on.
The advantages of leasing
a commercial space are mostly the reverse of purchasing a building. The
renter can still write off 100% of their annual rent but they do not have to
worry about building liability, maintenance, depreciation, and so on.
Some of the disadvantages of renting a commercial space include
less control of building maintenance, hence office space, no building equity,
and so on.
A prospective property buyer can perform commercial real estate research on
recent transactions to determine fair market values for a particular area.
A prospective commercial property renter can research the cost of office space
per square foot.
Basically, commercial buildings or space in major metropolitan areas are priced
higher than in rural or outlying areas. Rentals in large cities also command
a higher price per square foot.
Other factors for buying or renting commercial property include location, office
amenities, customer access, rent type (e.g., basic rent plus part of business
net paid to the building owner), rental maintenance, age of building, and so
on.
Answer Submitted on Wed, Oct 25 2006
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