How to Buy Commercial Property in the San Fernando Valley
The San Fernando Valley is one of the most fertile regions in which to conduct business in the United States. The area is home to more than 1.8 million people, stretching through multiple communities including Los Angeles, Burbank, Glendale, Hidden Hills, Calabasas and San Fernando. If have interest in buying commercial property in the San Fernando Valley, doing so can seem overwhelming at first because of the region’s vast footprint of 260 square miles. But with expert help and by following some of the advice below about how to buy commercial property, you can soon find your ultimate commercial property for investment or business use.
Determine Your Purpose for Buying San Fernando Valley Commercial Real Estate
Are you looking for a hub for your business in the San Fernando Valley? Or are you wanting to invest in the region to lease to other businesses? Maybe you want to combine these two purposes. If the latter is your objective, you can find a property to use for your company’s operations while renting space to others, at the same time. Whatever your purpose within the Valley, it is important to know what you need and how to buy commercial property.
Working with a commercial real estate agent will help you define your purpose. This agent will also know the local market conditions, ideal locations within the region and competitive pricing for what you seek. Working with a commercial real estate agent or broker you trust can save you hours upon hours of research time and footwork.
A San Fernando Valley commercial real estate agent can help you in many ways like:
- Understanding the market
- Determining the type of property and ideal attributes
- Figuring out how much you can afford
- Exploring your financing options
- Providing connections to other professionals like bankers, lawyers, property inspectors, contractors and accountants
- Helping you determine your closing time
- Protecting your interests
Overall, your commercial real estate agent is your guide in how to buy commercial property in the Valley.
Understand Your Financing Options
Also with the help of your SFV commercial real estate agent, it is important to understand your financing options before starting your property search. After all, financing is literally how to buy commercial property. Already having your financing in place or knowing if you will make a cash deal makes competing for your chosen property much easier. Without this preparation, you face losing your great find to another investor or other factors while you rush through paperwork and processes beyond your control.
Financing for commercial real estate varies according to the property’s purpose. Some types of financing include:
- Bank Balance Sheet Loans
- Commercial Real Estate Loans
- Business Loans
- Hard Money Loans
- Seller Financing
Understanding your financing options also means knowing what each type of loan requires. This is another critical point in how to buy commercial property and why it helps to have an agent on your side. For example, an SBA loan requires you to be an owner-user of the commercial property. To qualify for this financing, you must plan to occupy 51% or more of the square footage. You can lease the remaining space, if that is your plan.
Remember that Location Is Key
When looking for SFV commercial real estate, remember that in the Valley the mantra “location, location, location” is as true as anywhere else. Location is critical for the success of any commercial enterprise. Your commercial real estate agent can help you assess properties for the right mix of location factors for your type of business, such as:
- Foot traffic and exposure
- Proximity to other services
- Parking and access
- Population and demographics
- Economic outlook
- Supply and demand
Analysis Is Important
Buying San Fernando Valley commercial real estate is very different than buying residential property. With your commercial property, numbers must line up. You have to remember you are making a business decision, not one driven merely by aesthetics or gut instinct. Your final decision requires analysis and confirmation of the property details.
Analysis of a commercial property before buying starts with ensuring you can clear a profit. But you also need to put your analysis through stress-test scenarios. Scenarios to consider include:
- Increased interest rates
- Higher tax rates
- Increased vacancy
- Break-even point
- Necessary repairs
- Occupancy changes
Obviously, these are some of the more difficult points in how to buy commercial property in the San Fernando Valley. You should have a qualified San Fernando Valley real estate agent on your side, at the least. You likely also need a good commercial real estate lawyer and accountant to ensure you make wise decisions.