On the surface, it can seem that buying a commercial property is similar to a residential real estate investment. On finding the property (generally through an estate agent), an offer is made and if accepted, legal and due diligence is carried out before exchange and completion.
However, finding a property that works for your business is a great deal more complicated and the obstacles begin in the early search stages. Generally, commercial agents will have the knowledge and experience of the property rental market and choice locations that can be vital to your company’s success.
Initial meetings with agents often deal specifically with this search criteria; discussing preferred locations; type, value and sizes of property; plus any specific requirements or concerns you might have, such as parking and floorplans. It’s a good idea to have some idea of these points before meeting with an agent to expedite matters. Fees are also considered at these meetings and are based on a percentage of the ultimate purchase or rental price. This expenditure is only made in the event of acquiring a property, but there is often an abortive fee to cover costs incurred.
Important aspects to consider when searching for a commercial property agent:
- Their expertise in commercial real estate. Make sure the agent you choose is experienced in helping tenants find office, retail, and other commercial space (not someone who works primarily in the residential markets).
- Their experience in representing tenants in commercial property. Ideally, you’ll want an agent who consistently works only with tenants with a strong success rate. Find out how many similar companies they work with and listen to their success stories. It is often a good idea to ask for recommendations from previous clients here.
- Their success in your location and area of search. Experienced agents should have a depth of knowledge and network in the area you’re searching, this will help ensure you get the right space with the best terms.
Upon instruction, the agent will begin contacting their network of property owners and landlords. This is where commercial agents begin to demonstrate their value, as they will have access to a wide network and range of platforms exclusively available to real estate professionals.
This process is often on-going and can take months. It’s essential to remain in contact with the agent during this time and ask for weekly updates on their search with a breakdown of all potential opportunities. Further to sourcing the property, the agent’s role will also involve confirming the measurements and legal requirements of the property. It can be prudent to choose a firm that has a team of chartered surveyors who will be able to provide site surveys and condition schedules when you find a potential property.