Commercial property encompasses a wide array of
commercial property types, including office buildings, apartment properties,
malls, shopping centers, warehouses, distribution facilities, and research-and-development
or research-laboratory properties. Commercial property makes
up of a mix of commercial office and industrial space are called “flex” properties.
If 50% or more is office space, the commercial property is
called “office/flex.” If less than 50% is office commercial property,
it is called “industrial/flex.” Some flex commercial properties include research-and-development
or laboratory space. You will find all of these types commercial property
listings on BuildingSearch.com.
With the possible exception of raw land, all commercial property
for lease has one trait in common; they are capable of producing income, either
in the form of capital gains or rental income from the commercial
property. You can sort through these various commercial property
for sale listings on BuildingSearch.com. If you are a real estate developer interested
in commercial property, you can search for land listings among
the commercial property types of listings displayed on BuildingSearch.com.
Commercial property agents will engage in all sorts of activities
to help lease a commercial property for rent. This includes
marketing the commercial property for lease to other
commercial property agents who may represent a buyer or a tenant looking
for office space, retail listings, an industrial building, or any other type of
commercial property. Some commercial property
agents specialize in leased investment sales or speculative development of
commercial property for lease.
Commercial property for lease is measured in square feet.
commercial property buildings can be measured in “gross square
feet” or “net square feet.” A 1987 article in the New York Times offered definitions
of both terms of measurement of commercial property: Gross
square feet - “the sum of the areas at each floor level, including cellars, basements,
mezzanines and …. Included are all stories of the commercial property
or areas that have floor surfaces with clear standing head room (6 feet 6 inches
minimum) regardless of their use.” Net square feet - “the sum of all areas within
the perimeter walls of the commercial property unit measured
to the inside faces of said walls and including all columns, shafts, ducts and risers
whether separately enclosed or not.”
Often time’s commercial property is identified not only by
address, city or state, but by the submarket in which the commercial
property is located. Some submarkets are essentially commercial
property and residential neighborhoods, such as in San Francisco, which
identifies such places as “south of Market” and the “financial district as submarkets
of commercial property. Other submarkets of
commercial property are large office parks like the Marriott Business Park
in Santa Clara, California within Silicon Valley, in Northern California. Many times
commercial property agents will specialize in one submarket
more than others.
Commercial property for sale can have various types of leases.
A traditional commercial property office lease is considered
a gross lease – meaning the commercial property owner is responsible
for virtually all costs related to the leased commercial space, ranging from taxes
and insurance to water and power costs associated directly with that specific commercial property. By contrast, some commercial office
tenants, and most industrial and retail tenants, pay a net lease on their
commercial property. In such a scenario, the tenant is responsible for the
costs related to their space. Depending on how many of the costs are assumed by
the tenant, a lease may be considered single-net, double-net or triple-net
commercial property. See additional content on BuildingSearch.com for an
expanded definition of the various types of commercial property
for lease types. The difference in rates of the various types of commercial
property for rent can be great and often times there are costs the tenant
did not expect..
Some commercial property owners and commercial
property agents prefer to deal only with credit tenants when moving a
commercial property for rent in the hottest commercial real estate markets.
A credit tenant will often have an investment-grade credit ratings, as rated by
a third-party agency such as Moody’s, Standard & Poor's and Fitch. Any rating above
BBB-minus is considered investment grade and opens up lower security deposits for
leasing their commercial property. Commercial properties with
investment-grade tenants are often considered more valuable by investors. However,
with many of the commercial property leases conducted in Silicon
Valley, commercial property owners will lease to companies
that are startups or emerging growth companies because that is all the region has
to offer at any one time. When trying to lease commercial property,
time is the enemy and certain commercial property landlords
will take greater risk to take on a commercial real estate tenant that may not last
the length of the lease. This is usually done if the commercial property
owner is trying to get income to offset their commercial property
debt or satisfy the investors of the commercial property.
Tenants are advised to take advantage of these times so that they can receive the
best possible deal on their commercial property lease.
Click
here
to start your search.