In today’s real estate market, ensuring you have the right team of professionals supporting you on your buying or selling journey is essential to your success. This includes when navigating the complex waters of commercial real estate.
Who are commercial REALTORS®?
Commercial REALTORS® are critical players in the purchase and sale of commercial buildings or land. When you’re looking for someone to help you on your search, keep an eye out for the Canadian Commercial Network logo. This signifies the REALTOR® meets national criteria to be recognized as a commercial REALTOR®. Your commercial REALTOR® may also have one or more of these designations:
- AACI – Accredited Appraiser Canadian Institute
- ALC – Accredited Land Consultant
- CCIM – Certified Commercial Investment Member
- CRE – Counselor of Real Estate
- SIOR – Specialist, Industrial and Office Real Estate
Commercial REALTORS® can help you with each step of your transaction, including:
- determining the value of a specified interest in commercial real estate;
- providing due diligence and market knowledge to inform the search, negotiation, disposition, or acquisition of existing and new business operations;
- bringing together developers, landlords, and tenants to build premises to suit the occupant and confirming the purchase or lease before construction;
- sharing their expertise on the cost of lead generation and acquisition, technology, and the new marketing landscape;
- finding the best location, along with developers, and determining the best market conditions for construction to begin;
- ensuring you maximize the value of your assets and help develop the goals for the property. Commercial REALTORS® use their knowledge of the opportunities and needs of landlords and tenants, making it easier to bring them together in mutually agreeable leasehold interests;
- using their knowledge of the local markets to negotiate a contract for the use of office, retail or industrial space at a cost-effective price for both landlord and tenant; and
- working with you to determine the requirements for your office or company, then negotiating on your behalf for the most favourable leasing terms possible.
Commercial vs. residential real estate
Residential real estate consists of everything from single-family homes and rental residences with a maximum of four units—this includes individual condos, duplexes, and townhomes. Conversely, commercial real estate is anything consisting of five units or more. This includes offices, retail spaces, industrial complexes, hotels, and more.
Where families or individuals may rent residential units, commercial units are leased by businesses.
Information for buyers
When you work with a commercial REALTOR®, you get a business partner whose primary goal is helping you find the right space for you at the best possible price. They’ll advise, recommend, caution, and counsel you at all the significant steps in helping your business succeed in a new location.
Some key steps are outlined below to help you as you start your search. Your commercial REALTOR® will help you through these steps, but it’s good to have an idea of what the process is.
Property search
- Consider locations close to your customers, home, workers, vendors, or suppliers.
- Know when and where to buy your commercial property by seeking information on the current market. You can find the most up-to-date market information from the Canadian Real Estate Association (CREA) through CREA Stats.
- Consider the square footage, facilities, growth potential, street visibility, parking, security, etc. around the property.
- During initial viewings, make note of any visible damage or wear and follow up with a professional inspection.
Zoning and fees
- Check with your municipal affairs office or planning department for zoning regulations, land use, and learn how to apply for a zoning bylaw amendment if needed.
- Look into the insurance coverage required for your new space.
- Take into account any provincial and municipal taxes as part of your overall cost.
Closing the sale
- Consult a real estate lawyer who will do a title search, review the mortgage agreement and finalize all paperwork.
- Consider renovation costs to modify a building for your business needs and negotiate the price of repairs in the sale.
- When you’re ready, your commercial REALTOR® can help you negotiate and draft an offer.
Information for sellers
A commercial REALTOR® can give you up-to-date information on what’s happening in the marketplace, which is key to getting your property sold for the best possible price. They’ll also help you with marketing, negotiating, and closing. Commercial REALTORS® have knowledge and expertise in the marketplace, including the price, financing, and terms and conditions of competing properties.
Working with a commercial REALTOR®, will help you:
List your property
- Understand the market value of your commercial property and set your price accordingly.
- Get your property market-ready by painting, cleaning, making repairs, and landscaping if necessary.
- Professionally list the property and coordinate showings with prospective buyers when you’re ready to put it on the market.
Negotiate offers
- A real estate lawyer will review utility and property tax adjustments and consult on mortgage prepayment, discharge fees, and more.
- Consider what inclusions and exclusions will be a part of the negotiation of the sale.
- Consider negotiating as you may have multiple offers from different buyers to entertain.
Close the sale
- Accepting an offer will be contingent on the buyer’s credit, approval of the mortgage, terms agreement, and down payment confirmation.
- Be prepared for investment expenses such as capital gains taxes and other closing costs to be paid.
Information for leasers
A commercial REALTOR® has knowledge and expertise in locating the right property for your business. Working on your behalf, they’ll advise, recommend, caution, and counsel you at all the significant steps in helping your business succeed in a new location.
A commercial REALTOR® knows the leasing opportunities available in the marketplace for you and your business. They’ll work with you to determine your new property’s exact requirements and needs, and then represent you in the marketplace to get you the best possible deal.
When leasing a property, a commercial REALTOR® will guide you through:
Property search
- Considering locations close to your customers, home, workers, vendors, or suppliers.
- Considering the square footage, facilities, growth potential, street visibility, parking and security required to suit your needs.
- Noting any visible damage or wear and consider following up with a professional inspection.
Zoning and fees
- Checking with your municipal affairs office or planning department for zoning regulations and land use.
- Working with the landlord to determine whether expansion (if your business grows) or subletting (if you have extra space) is permitted.
- Commercial lease rates (leasing fees) are usually based on space size or square footage. Your landlord may add operating costs to this base lease rate.
- Determining what your landlord’s insurance covers and what your business is liable for.
- Verify which parties are responsible for property taxes or any municipal taxes.
Lease agreement
- Ensuring your lawyer reviews your lease agreement before signing.
- Reviewing your lease agreement to determine which repairs are covered.
- Confirming the lease length and the penalty for terminating the lease if required.
- Drafting and negotiating an offer.
Working with a commercial REALTOR® can help you feel confident as you move through the process. There are so many things to consider when it comes to commercial real estate, the value of having the experience and expertise of an accredited professional can’t be overstated.
Courtesy: realtor.ca
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