Owning a commercial building has long been considered one of the best ways to create wealth through the real estate market. However, while the upside of being a commercial landlord is immense, the proper due diligence is required prior to purchasing a property to guarantee that it ends up being a profitable enterprise. With this in mind, keep reading for 4 important considerations to make before investing in a commercial property.
With the United States eying a net-zero economy by 2050, commercial building owners are on heightened alert for building features that can help reduce resource consumption. While solar panels and other types of PV treatments are great means of reducing nonrenewable energy use, there are many other ways to improve a building’s energy efficiency. Some ideas include:
At the end of the day, investing in energy-efficient commercial buildings will not only be compatible with trends in the economy, but it can greatly reduce the cost of building ownership through lower utility bills along the way.
It is no secret that the rising cost of commercial rent has been putting a squeeze on tenants in recent years. The cost of overhead has caused many businesses to permanently close and others to shift to a partially remote model to help reduce their spacing needs. Furthermore, some businesses are getting creative in finding ways to share space to divide costs. Some examples include multiple restaurants using a single kitchen and disparate medical professionals sharing a central reception area.
Therefore, it is worthwhile to consider highly versatile commercial spaces that promote customizability. These types of buildings will appeal to a larger market and increase the likelihood that multiple businesses can use the space simultaneously. Some features to look for that enhance versatility include open interiors that are not restricted by permanent walls, acoustic wall panels to help absorb sound and prevent unwanted noise transfer throughout the space, and rugged terrazzo flooring that can withstand intense foot traffic and the frequent shifting of furniture during interior reconfiguration.
Thanks in large part to the COVID-19 pandemic, society has started to place greater value on functional exterior space. Not only can a few minutes outside give tenants a breath of fresh air, but it can also promote the release of positive endorphins wrought by natural sunlight that will help improve creativity and productivity in the office.
However, some commercial spaces in downtown districts do not have a surplus of sprawling exterior space to work with. This has led to increased interest in rooftop decks and other types of upper-level patios and landings to give tenants a chance to take a break outside.
While these types of structures are undoubtedly great ways to utilize every square inch of vertical space, there are some factors to consider to guarantee optimal performance of these areas. For example, as flat-roof patios will see a higher degree of foot traffic and moisture buildup, it is important that they be equipped with innovative pavers that enhance both durability and drainage. In addition, check that b decking has been installed to the roof substrate. This will help transfer vertical loads to the building’s frame, guaranteeing that heavy roof insulation and foot traffic does not cause acute damage. Finally, make sure that adequate railing is installed, preferably hog wire or some other low-profile option that promotes safety without inhibiting views.
Speaking of safety, it should be a primary concern when shopping for a commercial property. Commercial building owners are inherently at higher risk of lawsuits than private property owners, so it is best to invest in buildings that aren’t an accident waiting to happen. Although there is really no limit on what could be considered a safety concern, some of the most prominent issues to keep an eye on during the shopping process include:
Is the parking lot in good condition and equipped with the appropriate amount of ADA spaces?
It can often be difficult for an untrained eye to spot potential safety concerns. Therefore, it is highly worthwhile to consider employing the services of a professional building inspector to take a detailed look at any property you are serious about purchasing.
In order for a commercial property investment to pay dividends, it is critical to do your homework and avoid money pits. Use the 4 important considerations listed above to start your research and find the ideal commercial property today!
Sam Willis is a freelance writer that loves sharing his knowledge and expertise on commercial real estate. He lives in Atlanta, Georgia where he enjoys spending time with his wife and researching real estate trends in his free time. Sam’s work as a freelance writer can be found on Building Product Advisor, a new construction industry resource.
Guest Article By: Sam Willis