In many of my consulting jobs over the years, I have been asked about location and access to various services and features as they relate to commercial properties a client may be considering for purchase or lease. This got me to thinking, why don’t the property owners know a lot of this information and list this data when selling or leasing their facilities? In residential real estate this is common practice. Information such as distance to local schools, crime rates, proximity to shopping, bus routes or major highways are usually listed as selling points. Why isn’t this type of information more prevalent in commercial property offerings?
The type of data that would be listed is quite different from residential real estate. The cost per square foot for property is not the only deciding factor for a business to make when deciding where they should locate. Depending on the industry and anticipated use for the property, many other details need to be known. These details can make a big difference in the total cost of doing business for a potential buyer or tenant.
Here are some of the things that commercial buyers and tenants look for when considering a new location:
Electric and Gas Company Provider – This seems like it’s a take it or leave it item for a property but if you live in a state where those items have be deregulated, there is the ability to shop around for their suppliers and rates. Other key factors such as the property being in an area that might have access to other cost saving utility measures such as being in an area serviced by an Co-Op or municipal power company can make a big difference in rates. That alone can sway a decision on the property because it could effect the overhead costs for the business.
Incumbent Phone Company – This has become less of an issue in recent years with the changes in phone technology and the rise in VOIP phone services, but it can still be a factor depending on the broadband data and internet connectivity available to the facility. These details and advantages can be very technical in nature. As the property owner listing the basics helps the prospective buyer filter out properties that can’t meet their needs.
Municipality and Zoning District – This saves a client a lot of time researching. They may have a planned used for the property that may not be allowed in certain areas based on the local zoning laws. If this information is available up front it helps the selection process and could move your property in to a more favorable category. Knowing the municipality can speed the research on taxes or other regulatory issues that may have an impact on a particular kind of business or type of use.
Traffic and Popularity – If a business is more retail focused then they have an interest in the popularity of that location. How much exposure does the location provide, foot and highway traffic are major factors. Knowing how many homes and businesses are within a given distance of the location makes a difference. If a property owner has this level of information, the buyer can make a better informed decision.
Internet Providers Available – Every business needs data connectivity. The quality and capacity needs vary. Knowing who the providers are and if there are more than one or two choices is a big factor in the costs and services available. Distance from fiber connectivity can big a big item for some industries. Being able to provide this level of detail for your property speeds the decision process for the buyer and can also allow you to get a higher price if those conditions are favorable over other properties being considered.
Cell Phone Provider Coverage – An often overlooked amenity that can be very aggravating after the fact. This has an impact on both employees and customers. We live in an age where phones are an indispensable part of our daily life. Not having coverage by one of the major carriers at the location can make the property less desirable.
Building Facilities – This information relates to items such as power availability and in what capacity (three phase and such), existing communications wiring, or ease to install new. There can be huge costs to locating in a building if the tenant is not able to cost effectively run fiber, data, and phone cables from the basement to the area being leased or purchased. Also, knowing ownership of existing communication wiring and the ability to use it can be key. Sometimes the cable and phone company owns the wiring and other times the building owner does. Control over that asset makes a difference to the new tenant and their costs to move in. Access to roof rights can also be a plus along with ease of cabling to same. Some industries rely on various wireless technologies such as satellite terminals that need the antenna mounted on the roof. In a multi-tenant building this can be a highly desirable feature.
Creature Comforts and Environmental – Does your property provide for heating and air conditioning? What type is it? Are there bathroom facilities in the space or is that provided in common areas? Elevator access, freight elevator? On site food and/or cafeteria available? These are all additional benefits your property can have available that you should make note of in your marketing materials. Proximity to local restaurants and other facilities can be nice to list as well. Maybe even go so far as to publish typical commute times to various airports, hotels or communities that exist in your region.
Transportation Accessibility – This has different meaning for different industries. Easy access for employees to commute by car or mass transit can help the value of the property. Just as important though can be truck, train, and freight accessibility. Some businesses are logistics intensive. Easy access for trucks is key. On site overnight parking for delivery trucks can be a benefit. Truck drivers have specific appointments for delivery of cargo but usually arrive early. If they have facilities to be able to park and get some sleep, that can be a plus for some businesses. Proximity to rail facilities is also another factor for some. Rail is an efficient mode of transport for bulk products and can help lower costs for a business. If your property can allow them to take advantage of that mode, your value to them increases. Logistics is huge today and being able to highlight those advantages is a good way to increase your property value.
Local Housing Availability – If a business is new to the area and relocating employees or hiring new employees that move in from out of the area, local housing conditions may help promote your property. Data on homes available for sale and rental would be something useful. Knowing costs for the same can help swing the value of your property if those numbers are more desirable than comparative locations. Smart employers want to have happy employees and if they relocate to an area where the housing is expensive, hard to find or makes the commute long, that hurts the quality of life and makes it difficult to attract good talent for that employer.
Other Demographic and Economic Data – This may become attractive information to a company that would have a large employee base. Listing data points like the average median household income, housing costs, taxes and such makes a difference in what their employees may get to keep of their personal income. It may make their salary look more attractive even if the salary numbers seem to be below national averages. If the employee has more buying power or can keep more of their paycheck , that can make your property look more attractive. Other key items in the economic information can be things like low or free college tuition costs, access to great training or education facilities and employment opportunities for their other family members.
Quality of Life Data – This can be many things but still important to showcase. Proximity to schools, colleges, outdoor activities, hospital and medical facilities are all factors that weigh in on lives that could be affected by living in the area of your property. Different industries will see these items in a different light but why make them have to do all that research on their own? Why take the chance that some other property owner has this information listed and is easily available to help a buyer make their decisions.
The more the property owner can provide this information to a potential buyer or tenant, the more likely they are able to command a better price for the location. The old adage of location is key in real estate still rings true. The amount of detail that can make a property better for any given situation is complex. Make it as easy as possible to make that decision to buy or lease your facility.
I can help compile and provide a lot of this information if the data is not already known. The software tools allow for processing a large number of properties at the same time. If you have a large portfolio and want to update the information on those properties, feel free to make contact.
If you are in the market considering properties for purchase or lease, I can assist in providing this level of detail for the locations under consideration. If you have more complex criteria I can provide those services as well. Examples would be showing potential locations within a 15 minute drive time of a given point, or ideal locations if you want to expand to three new facilities. This research can get in to great detail such as examining the types of mobile internet users in a given area or location and their travel habits. Contact me with your requirements.