Buying commercial real estate, either as an investment property or a new location for your business, is a big decision. Regardless of the reason you are searching for commercial property, you will need to do thorough due diligence to confirm that the property is a sound investment and not riddled with risks.

When investing in commercial real estate, you will want to familiarize yourself with the physical asset at the absolute minimum. But before you sign on the dotted line, there are some questions that you should ask to make sure the property is right for your business.

Here are some important questions to ask your commercial real estate agent when you’re viewing a potential property.

Questions To Ask

When touring potential properties, it is crucial to stay grounded and ask important questions that can ultimately determine your long-term satisfaction in the space. If there is a time to ask all of those questions about your potential space, the property tour is it!

Here are some key questions to consider when viewing commercial property.

How Long Has the Space Been Vacant?

A commercial space that has remained vacant for an extended period of time may present a prime opportunity to negotiate lease rates and terms with the landlord. Every month that goes by that the owner/landlord is not collecting rent on the space or selling the property outright means a total loss for them. You want to explore options that are favorable to both sides but that can save you money in the long run.

What is the Property’s Zoning Classification? Is it Suitable for the Intended Use?

Always check with the city to ensure the space you are interested in is properly zoned. In addition, you will want to confirm that your particular “Use” is appropriate as well. Just because the zoning meets the city’s requirements does not mean your particular “USE” will be approved.

What Type of Commercial Lease is Being Offered?

Knowing what type of commercial lease is being offered is one of the most important items to consider when looking at properties for your new office space. The type of lease determines how your rent bill will be calculated. Ask to see a sample copy of the property’s lease to review it yourself.

What is the Minimum Lease Term?

Typically, commercial properties offer lease contracts with a minimum term length of at least a year. Many contracts require a 3 to 5 year commitment. Longer terms can be restrictive, while shorter terms allow you to be more flexible if you don’t want to be tied down to a property for a certain amount of time. However, long-term contracts give you more negotiating leverage and security with predictable rental costs.

What Insurance Coverage is Required?

Commercial property insurance, a necessity for any real estate owner, covers your buildings and its contents, external signage and other unattached fixtures such as a fence or small storage shed. Whether you face a burst pipe causing water damage or theft or vandalism, the type of insurance you buy and which insurer you choose can mean the difference between speedy claims service and a claim denial.

Is the Property Up to Code?

Commercial building codes in your area could vary from town to town. For all you know, there could be aspects of the property you are looking at that may need to be updated in order to meet the regulatory requirements. If it is not, it will be your responsibility to make those improvements so that the property is up to code.

Familiarizing yourself with local ordinances and other regulatory codes in the property’s location will help you train your eye to search for parts of the property that do not meet requirements. There are plenty of resources you can research on your own about your property’s building code requirements. Most states have a .gov resource that outlines the information you’ll need to know.

Does the Building Have Any Amenities?

Is there a fitness center, building conference room, onsite deli, or other amenities that you and your employees have access to? If so, are they included in the cost of your monthly rent or is there an extra charge?

How Many Parking Spaces Are Allotted to the Space?

Your lease should clearly spell out how many parking spaces will be available for your team. Often, your allotment will be based on the usable square footage of your office. Be sure to do the math and find out if the proposed ratio of square footage to parking spaces is sufficient for your customers and employees. It’s a good idea to poll your team to find out how many people drive their own vehicles to and from work versus how many carpool, bike or use public transportation.

How Do Customers Access the Space?

Tying into the first question, accessing a building is not always as easy as it may seem. Some buildings automatically lock their doors past a certain hour, or the hours of open access might not align with your business hours. Some buildings will have a receptionist or security guard that can give visitors access to your floor. If not, you may have to leave your office to greet your visitors and escort them to your suite. This may factor into your customers’ overall experience.

Who Are the Other Tenants in the Building?

Depending on the type of commercial property you buy, there may be tenants operating there. Commercial property ownership will involve you working with current and future tenants running their businesses out of your property.

Considering the tenant experience will be a cornerstone to your property, knowing any current employees will give you a head start on building those relationships.

You will also learn financial information that will determine the investment potential of the property. For current and future renters, knowing the property’s rent roll will give you a clear picture of what the rental income range of the property could be.

Learning about the payment history of the current tenants will help you assess their reliability as tenants. If they are consistent with their rent, you have a sound income source already confirmed for the property. If not, you will be better prepared if you need to make adjustments.

Does the Building Have Onsite Management/Maintenance?

Onsite stationary maintenance and engineers can be a huge benefit, but whether or not they are onsite depends on the complexity of the building systems. If there is no maintenance on-site, it is important to know how to report any issues, such as electrical or HVAC problems. Additionally, will you have to hire a cleaning service or is there one provided? These questions can determine if there are additional costs or if more research needs to be completed on your end.

Why Choose IPA Commercial Real Estate?

Choosing the right commercial property management company can make real estate ownership a breeze. For people who own commercial and industrial properties, working with a respected property management company can be a great resource. With 30+ years of experience in the Inland Empire, the experience of the IPA Commercial Real Estate team provides a depth of knowledge regarding maintenance and project costs.

Just like management in any other business, a respected management company can monitor the care and financial requirements of any property. We can also help evaluate your rent structure. IPA Commercial Real Estate very focused on client properties and tenants and we have the skills and knowledge to make your ownership experience easy and pain-free.

We offer 24/7 Service from our team day or night! Call IPA COMMERCIAL REAL ESTATE at (951) 686-1462 to discuss how we can help you. Let us show you how to add value to your property.