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.

Retail

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:

• What type of retailer is it?  Does it sell shoes, hardware, food, clothing?
• Is the property the right size for that particular business use?
•  Is the property in a part of town with the right demographics for the store’s target customer?
• Are the other businesses located near the site a good complement to that store so that it will attract extra foot traffic to its location?
• Is it easy to get to the property based on the surrounding streets and traffic patterns?
• Is there enough parking? Is there too much parking?
• Is the property equipped properly for shipping and receiving?
• Are there proposed changes to the surrounding area that might adversely impact the store?

There are hundreds of other questions to ask when analyzing retail space.

Office

The factors to consider when evaluating office space are much different than those of retail. These factors can vary greatly within the office category depending on the type of business the office will support. While most would agree that visibility is more important in a retail environment than it is in an office environment, all offices are parts of businesses, and many business owners and leaders have come to realize that brand exposure is always a good thing. So even if customers will not be visiting and coming inside a business’ corporate office, having the logo on the side of a building in a high traffic area can be good for building brand awareness and ultimately acquiring new customers. However, visibility is not always a good thing. Psychologists, for example, will often look for office locations that are more secluded in order to provide their clients a sense of privacy and confidentiality. While there are exceptions, those looking for office space are probably going to place the most emphasis on property characteristics, such as:

• Can the space be designed to provide a comfortable work environment for the staff?
• Is the space located conveniently in relation to the majority of the staff and so that it will serve in recruiting future employees?
• Is the space scalable to accommodate the company’s growth or downsizing?
•  Is the location easily found by the company’s clients?
• Does the location provide easy access to transportation services such as major highways and airports?
• Does the location offer quick access to other amenities such as restaurants, fitness facilities and day care that will be needed by the employees?

Again, there are literally hundreds of questions to consider when evaluating property. That’s why it’s so important to work with a specialized expert. If your agent doesn’t have ample experience in a particular area, he or she will simply not know which questions to ask up front to avoid problems and find a good match for your needs.

Grayson Powell is a Managing Partner at Coldwell Banker Commercial Sun Coast Partners (CBCSCP). CBCSCP leverages the vast experience of highly-skilled real estate professionals and developers and specialize in selling, leasing and managing retail, commercial, and investment property. To learn more about CBCSCP, visit www.cbcwilmington.com or call 910-350-1200.