I’m not ashamed to admit I like commercials.
Commercial properties that is.
If you thought I was talking about those things that used to run between programs, then no, I don’t like commercials.
You remember commercials right? Way back when people watched one episode of a show at a time. When I say “a time”, I mean one specific time when it aired and you better not call the home phone and make me get up and go into the kitchen and miss part of the episode.
I’m talking about commercial properties, specifically retail properties.
I’m currently working with a couple of commercial clients looking for space for their businesses.
In one case, it is an expansion to new, larger, nicer quarters so the business can grow.
In the other, it is a newly established business, looking to find a space so their dream of a business can become an actual operating business with customers.
While all Realtors take courses for both residential and commercial real estate, if you assume all Realtors can handle commercial deals, you are going to be disappointed.
That’s like saying all Canadians study French in school, so all Canadians speak French. Bien que nous nous souvenions d’une ou deux choses, beaucoup de gens ont oublié tout sauf les paroles de Frere Jacque.
There are of course Realtors who focus on commercial real estate. These guys (and they do tend to almost exclusively be guys) work for commercial brokerages and focus on larger deals. When a factory is sold, a land parcel is developed or an office tower is leased out, it’s mostly likely involving full time commercial realtors.
That leaves an awful lot of smaller commercial properties that are being sold and leased.
These properties use Realtors that likely do both residential and commercial. When you delve behind the scenes, there is often a relationship between the landlord or tenant and the Realtor that is based on residential real estate transactions.
This means that we have lots of Realtors who do commercial properties very rarely. They might end up dusting off their old commercial real estate textbooks, or they might just wing it.
Without a doubt, commercial real estate has some significant differences from residential real estate.
The most fundamental aspect has to do with fit. With commercial properties, if the intended use doesn’t fit with what the landlord wants, what the property is zoned for or what the purchaser or tenant needs to run their business – it just won’t happen.
This is quite different than residential real estate, where you lower the price enough and a property will sell or rent. After all, if you’re looking for a residential property where you can live, it is really just a question of how well the place fits your needs and your budget. If it really fits your budget or is under it, you might consider revising what you “need” in the home.
For a commercial purchaser or tenant, the space needs to work.
If you run a store that relies on being visible and having decent traffic pass by via foot and car, then you can’t rent a 2nd floor space in an industrial plaza. Well, you can, but the landlord will have to rent it out again in a few months when you go out of business.
If you need a restaurant with a full kitchen, roof venting and space for up to 50 customers, the office space on the 12th floor of tower ain’t gonna cut it.
I have represented sellers and buyers as well as landlords and tenants on commercial deals and I can tell you that the fit has to be there, otherwise it just doesn’t take place.
To make matters more complicated, the landlord in a commercial lease has to believe that your business can succeed. The term “covenant” is often used as a short form for the strength of the tenant and the overall lease agreement.
A large, corporate client might have a very strong covenant where their word (the actual covenant in this case) to live up to the terms of the lease is considered reliable. A smaller tenant who is starting a new business and doesn’t have the track record to show would be considered to have a weak covenant. Basically, it is uncertain whether they can in fact live up to the terms of the lease, including paying rent and following through on their other obligations.
Commercial deals are complex and require the Realtors involved to understand how businesses operate so they can assist their client (either landlord or tenant) in deciding if a given space is the right fit for a particular business.
I enjoy the challenge of helping broker a deal between commercial owners and purchasers or tenants and my years of running businesses and my studies at business school allow me to bring a fairly unique understanding to the table.
If you or someone you like is considering buying, selling, renting out or renting a commercial space, please don’t hesitate to get in touch. I’d love to be responsible for what comes next.
Regards,
Jeff
LOW SILL
One of a window’s most important function is to put you in touch with the outdoors. If the sill is too high, it cuts you off. On the first floor, make the sills of the windows which you plan to sit by between 12 to 14 inches high. On upper stories, make them higher, around 20 inches.
This lesson is fascinating to me because we don’t often think about aspects of a window such as the location from the ground. We talk about nice big windows, new windows, small windows, but we rarely talk about the placement of the window.
I’ve been in many homes where fantastic views of lovely spaces are only visible from particular positions (like standing), which shows that many builders don’t think about these aspects either.