When businesses are successful, expansion can be a smart undertaking. The company can increase the number of products it manufactures or how many consumers can access its goods and services.
Unfortunately, growth is also a dangerous time for otherwise successful organizations. Sometimes, executives make mistakes during expansion efforts. They might select the wrong location. They might agree to pay too much when offering to purchase commercial real estate or when negotiating a lease.
As a company starts evaluating facilities for an upcoming expansion, there are several key factors to consider when looking at individual commercial properties.
1. Ease of access
Particularly if the intention is to allow customers or clients to physically visit the business, it is of the utmost importance to ensure that people can easily get in and out of the parking lot.
Factors including speed limits nearby, traffic density and even proximity to intersections and other driveways can influence how accessible a location actually is. Accessibility is key to attracting consumers and minimizing worker frustration.
2. Systems in need of repair
It is common for commercial landlords to have certain maintenance obligations to their tenants. When a business buys commercial real estate, it has a responsibility to maintain those premises for the safety of workers and visitors.
While successful organizations are often in a position to make improvements and expansions to existing facilities, it is still important to ensure that the price offered reflects any issues with the condition of the property. Commercial tenants and buyers need to know what repairs or improvements may be necessary to use the space as intended.
3. Local market concerns
A business that thrives in one location may struggle to cover operating costs at a different facility. Every community and neighborhood sees a different amount of traffic and features different demographics.
Particularly when standing businesses where customers or clients physically visit the premises, researching the area to ensure that there is enough demand to sustain the expanding company can be of the utmost importance.
The entire process of evaluating and purchasing commercial real property can be incredibly complex. Organizations preparing to expand into new facilities often need help performing due diligence, working with local authorities and drafting a reasonable offer.