Location

suburban strip mall and downtown buildings with taxis in frontWhen starting your business you will need to choose a location.  This could possibly be a space in your home designated for this purpose.  However, if your business requires you to be open to the public, your home is not zoned for your business or you need to have a more professional look, then you will need a new location.  If your office needs are very limited, you may want to consider using an incubator space at a local economic development center until your business is strong enough to afford a larger space.  Otherwise, you will have to buy or lease a space.  

As you search for real estate agents, consider the following:

  • Where do you want and need to be located?
  • How much space do you initially need?
  • Can you share office space?
  • What can you afford?

Most realtors will want to know the answers to those questions in order to qualify the locations they find prior to showing them.  However, you should make sure you know who you are talking to and who that person represents before you share any information with a real estate agent.  A good buyer’s agent will actively work in the buyer’s best interest to locate a property and negotiate the best price for the buyer.  On the other hand, a seller’s agent represents the seller and tries to get the highest price for that person.  Agents are technically required by law to disclose who they are working for at the first “substantive discussion,” but this does not always happen.  They should ask you to sign the “Consumer Notice,” which proves they disclosed these different relationships.

When choosing a realtor, you will want to do a little bit of investigating.  First, you will want to choose someone who is a member of the National Association of Realtors (NAR) and specializes specifically in commercial property.  Your agent may be a Certified Commercial Investment Member, however this is not necessarily important.  An agent's experience and production levels will be more valuable to your decision.  You can visit www.realtor.org and www.ccim.org to search for agents, or you can click on the links below. 

In addition, find out about the real estate agency.  You will want to work with a reputable company, where your agent will have a strong support staff if necessary.  Enterprise has business biographies on several Pittsburgh area real estate agencies, who specialize in commercial real estate, are members of NAR and who employ trustworthy and experienced commercial agents.

When choosing a commercial real estate agent…

While you search for a commercial real estate agent, you will want to ask them several questions and evaluate their answers before committing to an agent.  Before committing to an agent, ask the following:

  • Are you a member of the National Association of Realtors?
  • Are you a Certified Commercial Investment Member?
  • What have you done in the past year to keep current in your area?  Classes?  Seminars?
  • How long have you been working in real estate?
  • What kind of client’s have you worked with in the past?
  • What kind of properties have you worked with in the past?
  • Do you specialize in real estate in a particular town or area of town?

Although you will still probably want to keep your eyes open for property, you want to ensure that your agent is actively looking to find a property or to sell your existing property.   Choose someone who seems to be energetic and hard-working.  In addition, consider that different agencies will valuate properties differently and have different commission structures.  Find someone that has plenty of experience in your area and seems to give you a reasonable price regarding building valuation.  Finally, look for an agent that has a strong personal and professional referral network both within and outside of the real estate industry.

You will also want to find out about the agency.  Ask realtors:

  • How long has your agency been in business?
  • How many agents specialize in commercial real estate at your company?
  • What is your agency’s commission structure?

In addition, you will want to ask several colleagues and associates for referrals in order to determine the reputation of your real estate agency.

If you are buying consider…

  • Is this agent moral and ethical?
  • Do they know the market differences between buying and leasing?

Since realtors are paid on a commission of the total sell, there is a conflict of interest in negotiating a lower price for you.  Therefore it is very important for you to select an agent that will act in a manner that will benefit you when conducting negotiations.

If you are selling consider…

  • What kind of marketing will you be doing for my property?
  • How will you be finding buyers? 

The more extensive the agent’s marketing, the quicker the property will sell and perhaps for a better price.  And no matter if you are buying or selling, don’t choose an agent that you feel will only push their own listings.  Your agent should be working for your best interest.  Above all, remember that pretty much everything in real estate from contracts to price is negotiable.  Investigate several options before committing in writing to working with anyone.

After you commit to an agent, you will begin looking for business locations.  Unlike home buying, which is oftentimes more personal and impulsive than purchasing an office space, you will have many hard facts to evaluate.

No matter whether you lease or buy, you will want to assess …

  • The demographics of where your business is located to ensure that you are near your target market.  Creating a customer base is difficult enough, it is not necessary to make distance a hurdle for marketing to overcome.
  • Your proximates to neighborhood traffic generators, such as other retailers, sports and entertainment facilities, industrial or office parks, schools or colleges, hospitals, public parks, libraries, and highways.
  • Your distance from competitors or complementing businesses.  A new business can benefit from the advertising of other companies who target a similar audience.
  • If the location is zoned for your type of business.
  • How much renovating or repairs would need to be performed before the building can accommodate your business.
  • If the facility is large enough to accommodate your business both now and after several years of growth.
  • If the location is convenient for you and/or your employees to travel to.
  • If the location reflects your marketing image.  You do not want have a stuffy office if you cater to an upscale crowd.
  • If you are in a safe area with a low crime rate.
  • If the building is easily accessible from main roadways, near public transportation stops, has adequate and affordable parking accommodations and is easy to find.

In addition if you have chosen to lease space, find out:

  • What kind of security the building has.
  • The maximum occupancy for your space.
  • What utilities, services or supplies are included with your rent.  This includes cleaning services, Internet connections, office furniture, etc.
  • If there is storage space available.
  • If there will be room to expand.
  • The type of lease and the legal obligations associated with that particular lease.
  • If you can remodel or redecorate and if so, to what extent.
  • If there are any particular building or behavior policies, such as no pets, no smoking, etc.

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