In almost any endeavor that requires outside support or help, the level of importance on successful results will determine the value of choosing the expert who is most likely to deliver those results. If you have a sprained ankle, you’re probably okay having a young medical intern at the nearest urgent care center wrap it with a bandage; but if you need a heart transplant, you’re probably going to do a lot more research to find the best possible surgeon, and be willing to travel as far as necessary to get to that surgeon. In your decision making process, you’re probably going to consider the number of years a given heart surgeon has been practicing and the level of expertise and success he or she has exhibited in the specific type of surgery that you require. A heart surgeon, who specializes in transplants, with 17 years of experience and 100 successful heart transplants is probably a smarter choice than a general heart surgeon with 20 years of experience, but only two transplants. The point is that when it comes to heart surgery, there is no substitute for experience; and expertise in a highly specialized area, like heart transplants, is a necessity if you need a new heart.
While nobody would ever argue that commercial real estate is as important as a heart transplant, most would argue that making a large investment in commercial real estate is an important enough decision to seek the guidance of a commercial real estate expert. Commercial real estate is an extremely specialized business. Thinking that all real estate is the same and that all real estate agents share the same skills and expertise is like thinking that all restaurants are the same and all cooks and chefs share the same skills and expertise. I’m not just talking about the difference between residential and commercial real estate. Even within the commercial real estate category there are many subcategories that each have unique attributes and require years of experience to understand completely. The factors that make for a good industrial property are much different than those related to a successful retail property. Whether you’re looking at office space, apartment buildings, medical facilities or just an investment in land, each type of real estate has an extensive set of specialized considerations. I’ve been in the commercial real estate business for more than 28 years and while I do consider myself an expert in certain commercial real estate categories, I am admittedly not an expert in others. If I have a client looking to invest in an area outside of my expertise, I don’t hesitate to recommend someone else who is an expert in that area. Before engaging in any commercial real estate transactions, you should ask the necessary questions and do your due diligence to ensure that your agent is a true specialist in the specific area of interest.
Location, Location, Location
We’ve all heard the cliché “location, location, location” used to emphasize the importance of the location of a business or commercial property. It’s true that location is one of the most important factors in commercial real estate decision-making – but not always for the reasons one might think. The ideal location is not always the most visible or the one best situated for traffic flow. In fact, there are many situations in which traffic and visibility are undesirable. The ideal location is dependent on a wide range of factors related to the intended use of the property and the goals and needs of the people involved with it. Let’s look at a couple of examples.
Retail versus Office
Two specific subcategories within commercial real estate are retail and office. Let’s highlight how different the factors and considerations really are from one property type to the next.
In the case of retail space, the “location, location, location” cliché usually is a good place to start, and it usually is important that the location be one that provides high levels of exposure, visibility and traffic. There’s no better advertising than for ongoing streams of people to see the physical location over and over again as they drive by and know that the business is located there. But there are many other factors to consider, such as:
Cece Nunn - Nov 11, 2019
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