Commercial real estate may turn out to be one of your best investments. Whether you’ve created your small business from the bottom up or are just getting started, you’ll eventually have to address the question: Should you buy property for your business? Even for seasoned investors, purchasing commercial real estate may be a difficult task. It’s not the same as purchasing a residence. Instead, it takes effort, research, and forethought.
According to the US Census Bureau, retail sales in the United States declined 16.4% from March 2020 to April 2020 and were down 21.6 percent from April 2019. At the same time, the retail market has been under strong pressure due to the expansion of Internet shopping and changes in demographics in secondary markets.
So what should you know before starting a new retail development in this climate?
Location is Key
Think about the reason for your new development and then look at any other amenities close by and access and public transport links. This will play a huge factor in how successful your development will be and whether or not it will attract the type of clientele you are aiming for.
If you are using this for a warehouse as well as a retail unit, you need to consider your location regarding rail, highway, or shipping lanes, access to the site for large or oversized trucks or vehicles, and if this type of activity is allowed. For example, in built-up areas, you may not be able to make or receive overnight deliveries that could disturb the peace in the local neighborhood.
Does your new building or land have space for parking? This is an important factor for many businesses, and on-site secured parking can help you attract a wider range of interest in the project.
The condition of the building or the land what you are acquiring is important as you are planning to develop it. From renovating the building to accommodate the new business, it will house a purpose-built facility that meets those working within the building. Take care to focus on the exterior of the building, too, such as using a rainscreen panel manufacturer to enhance the exterior.
Make sure you inspect for materials such as asbestos or lead paint that can be harmful to both people and the environment, and if any evidence of this is found, you need to make sure it is removed and disposed of safely.
Also, ensure any changes you make are up to code, and you have the correct permits to allow for the changes to be made and for the right class of use when the work is completed. In some cases, local state governments may have incentives to encourage companies to attract specific businesses to the area.
Check you are adhering to stipulations regarding electrical and gas works and zoning permits to allow for a change of use if required. Becoming familiar with the local zoning laws can help you consider any changes you need to make going forward and avoid any costly mistakes.