Commercial Property Analysis

Property or real estate is a mainstay of most business profiles. As the McDonald CEO once quoted that in contrast to the world’s view of McDonalds as a fast food outlet, McDonalds is in-fact in the business of real estate, it owns more properties than any other organization world wide through its franchise network. The properties can be differentiated among main categories like residential and commercial. Residential property is, as the name suggests mainly used for homes and flats for personal use. Commercial property is used by business establishments for their offices and conducting their business activities in the case of retail outlets.

Commercial property is laden with various legal guidelines and rules. The cost and location of commercial properties are on the high side, as compared to residential property. A lot of analysis and information gathering is involved in short listing a particular site for commercial or office purposes. These deliberations are done by experts and professionals including legal experts, who look into all aspects with due diligence. They will also consider the bylaws of a particular area before giving the go ahead for procurement by a business. Sometimes a business will have to gain a license in order to trade as they wish to on a particular property.

Advisors and analysts for commercial property look into the following broader areas for selecting a viable commercial property:

• The demographic location and socio- economic make-up of the area.
• The bylaws and the long term development plans of the government or the governing body, for the area.
• The tax benefits or rebates for the business entities, for conducting business from that area (if any)
• The financing options available for procuring property in that area.
• The renting and the subsequent trends of the area/property.
• The need of renovation and refurbishment (if any) and the expected cost involved in it
• The special economy zones as allocated by the governments keeping in mind the welfare of the business entities and in turn developing the area through offering various sops to the institutions for establishing base in these assigned areas.

These factors can be researched and can even be tracked through various studies and surveys conducted by organizations and government alike. The lack of clarity in many commercial property deals is an ongoing spanner into the fast moving industry of real estate, however taking appropriate prior consultancy will always help. Consultation and interaction with the establishments in the area which have been working from there, can give some valuable insights into the possible likelihood of success. The resale value and the rate of appreciation of the property are also deciding factors for commercial property buying. The seller though, might face the initial apprehension from the new buyer as the financial commitment in buying a commercial property is huge and thus involves more time to materialize. Potential buyers are advised to go through all the details even minor ones, before making a final decision as this will not only affect the company or the owners but also a lot of people who will be working on the premises and using the property for advancing the business interests of the institution.