Starting or expanding a business in a new area is risky for those who haven’t done their research. And though each case is different and involves complicated numbers and high-stakes decisions, here are some rudimentary tips to get things started on the right foot.
1. What’s the Economic Impact of Commercial Real Estate in Washington?
Commercial real estate is invaluable to state and local economies. Thanks to commercial development in 2016 alone, 3.3 million jobs were created and supported in Washington state, contributing to 16.8% of the U.S. GDP.
So, when business owners decide to build or expand, they’re not just benefiting themselves, their choice significantly adds to the country’s economic health.
With that macro-boost of confidence, let’s look at some important factors to consider when making the leap into commercial real estate.
2. What’s so Great About Commercial Real Estate in Olympia?
3. To Lease or to Buy, That is the Question!
Depending on the owner’s short and long-term goals, either can have its advantages. Ask the pros at Kaufman to do a lease versus purchase cost analysis before committing foolheartedly to one or the other. If you have a new business, it’s best to wait until you have a steady revenue and perhaps some savings before diving into full-fledged ownership.
Short term leases afford business owners some flexibility when navigating the ever-changing markets. Planning ahead is difficult and unpredictable in the first few years, so ask your real estate agent about long and short-term leases. They are highly experienced and will be able to advise you on which is best for your unique situation.Tip: Short-term leases for businesses aren’t like their residential counterparts. Three to five years is typical for a short-term lease, whereas a long-term lease could commit you to around ten years of payments without the prospect of building equity.
When it comes to having a roof over your head, the best things in life are not free. Comfort and functionality come with a price. But fortunately, we’re smart creatures and know the trick to paying only fair prices for the things we need. That said, ask your property manager about maintenance costs, repairs, rent increases, insurance, and utility prices before entering into a lease agreement. This will give you a more accurate estimate of monthly and annual costs. Compare these numbers to what the monthly costs of ownership would be and make a decision after you’ve done the hard work of getting all the data and financial speculation out of the way.
4. What are the City’s Zoning and Permit Laws?
Anyone who has owned a home knows that building a back deck or tearing down a dilapidated garage isn’t as easy as tearing it down and reconstructing it “just like they do on the DIY channel.”
What you’ll find is that your fancy new deck now needs guardrails around the entire perimeter and your custom garage is now a violation of city permit laws. The same rules apply to commercial buildings, so be sure to learn about local building design codes and safety standards before deciding on your next purchase.Tip: Did you know that the city of Olympia requires all structures to have a roof design/slope that allows rainwater to drain at 1 inch per hour?
5. Who is My Clientele?
Maybe your great new office space or facility meets your requirements, but will it be accessible for delivery trucks, clients, employees, or other visitors? What’s the parking situation like? How is traffic in the area? What amenities are nearby? Asking these questions early will help you make the best decision possible and ensure that there are no unpleasant surprises along the way.
Kaufman Construction & Development knows more about commercial leasing the Olympia area than any other development firm. We offer what others can’t in terms of fast-tracking our own client’s projects, staying on budget, and maintaining quality standards. We’re excited to help you succeed in this beautiful, thriving area.