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.