Before COVID-19, offices and shared coworking space were doing very well across most markets. However, with the movement to stay at home, many offices were empty by the middle of 2020. And, many office space are still on the market after many months. But, does this mean it’s the end of office space forever? Thankfully, according to some studies, it’s not. So, in this blog post, we discuss the possibilities for office space in the future.
The Future of Office Space
Many people are concerned about the future of office space. This is for a great reason considering vacancies continue to rise each quarter since COVID-19 came to the US. However, just like with most commercial real estate properties, investors can see success with their space. It may take some strategy and creativity, but it can certainly be done.
Which Industries Will Always Need Office?
According to the Department of Labor Statistics, there are many industries that report not being able to work from home. Not to mention, for the industries that can work from home, a portion of the employees still report to the DLS that they cannot. So, even during and after the pandemic, many employees will need to come into the office to work. Below, you will find the primary industries that report they must go into the office to fulfill their job role. This information can help you choose which city to invest in, depending on if these industries are prevalent there.
Construction and Architecture
As you know, construction must be done in person. However, construction workers rarely come into the office to do their job duties since they must be on the worksite. This is why many investors brush off the idea of buying office space in an area near construction companies. But, construction managers do need an office to do their work.
For the most part, the managers and executives of a construction company need offices to do their jobs. In the same vein, those in the architecture field need offices as well. This is due to the software and technology they need to do their jobs. For this industry, upper-level employees need special equipment and tools to come up with blueprints. They also need meeting rooms to collaborate and plan their team’s work. By being remote, many mistakes can be made in the planning process, so it’s vital these meetings happen in person. Any mistake can cost the construction company thousands of dollars. So, this means this industry typically requires office space.
Engineering is another industry that requires its employees to work in the office. Just like construction and architecture, engineers require specialized equipment and software at their desks. There are many different subindustries for engineering, and many require engineers to sit at their desks planning, designing and strategizing. The software and tools needed for many engineers to do their jobs often cannot be brought home, which makes it impossible for them to work from home. So, for areas with many engineering firms, it’s a great idea to invest in an office space.
Many sales offices are open for their employees. These businesses are usually niche-specific such as electronics, paper products and even furniture. No matter what they sell, some employees have noticed how difficult it is to sell products to people over the phone or Zoom. At the end of the day, it’s very difficult to sell a product when someone can’t see it or feel it for themselves. Despite the boom in online shopping, there are many things people prefer to purchase in person. So, sales offices often need to meet in person.
What About the Success of Remote Work?
As you have likely heard, remote work is going very well for many businesses. According to one study, multiple industries are far more productive when they work from home. However, some companies will let their employees come back to the office environment once the pandemic is over. In fact, multiple large companies will let their employees choose whether or not they would like to be remote. For example, companies like Twitter, Airbnb and Qualtrics are all giving their employees options to work from the office once they can open their offices again. About 40% of employees report they are willing to come to the office a few days per week in the future. So, office space will still be in demand, even if remote working is instituted.
Get Around the Remote Working Boom: Purchase a Business Park
An option for investors is to purchase a larger business park, and lease out the space to multiple companies. Many organizations will likely want to downsize their office space as employees choose to work remotely a portion of the workweek. Because business parks are designed to house multiple businesses, it is much less expensive to lease them. So, there is a high chance businesses will move to business parks to save money, a crucial effort in today’s economy.
However, do keep in mind that business parks are not authorized to reopen in many states (as of November 2020). So, this may affect the rate in which businesses lease out your business park. But, once your state has approved people to work at their offices, it is a good time to invest in a business park. Utah is one of the states that is allowing people to occupy office space, as long as they follow safety procedures. Our commercial real estate brokerage helps investors in the Salt Lake City, Utah area, and we can help you find a great office space to invest in. Contact us today to get started!
Having a designated space where you and your employees can perform your daily tasks is important. When you don’t have an organized space to perform your daily duties, productivity can lower. So, purchasing a new office space can be a great business decision. In this blog post, we are going to cover why and when to purchase a new office space.
Why to Buy New Office Space
An office can be defined as a building or a section of a building where a company performs its day to day operations. The office can either be big or small depending on the business. It is a place where employees of a company can come together to conduct meetings and work together. A company can have one main office and also, that same company can have other branch offices that are located in other places.
There are several benefits of having your own office space:
How you present your company says a lot to customers. In particular, it can impact the individuals’ perception with respect to the professionalism of your business. This standard can likewise be applied to when potential customers come into the office for gatherings. Without a physical office space, most customer interactions would be email or phone calls. Whereas with your own business office space, you have a spot that you can feel confident welcoming customers to. This can be important to big customers as well as to make more sales for you.
Training of Employees
Training employees can be done in different ways. Offices give employees an open setting to gain new skills, build themselves and represent the company. It also gives open access to help from team members and superiors. Training virtually is possible, but it can take much longer than it would in an office setting.
The Best Time to Purchase a New Office Space
Now that you know the benefits of purchasing an office space, let’s discuss the best time to purchase one. The first few months after launching your business are stressful. At the start, getting an office may not be a priority because your major focus will be securing your first clients for your business. Hopefully, you will move quickly for a few months, and while it’s stressful and tiring, it’s also beneficial for profits. You can work out of a coffee shop or even at home because your only focus would be on how to make your business grow.
With time, things start changing and your business starts to grow. You are going to find you require a new office space eventually. When you start hiring new employees and have no space to meet with them, there is certainly going to be a need to expand. Below are the following ways to know you are ready to purchase a new office space.
During a Dip in the Commercial Market
Typically, most new business owners are worried about finances when it comes to buying an office space. They need a less expensive space that will meet their needs. This is why a dip in the commercial market is a great time to purchase an office. When there is a dip in the market, an office space will be far less expensive to buy. So, you can get a large, big office for your team at a lower cost. When you hear there is a dip in the commercial real estate market, consider seeking out an office space to save money.
When You Have a Downpayment Ready
You should only consider buying an office when you can afford it. With that being said, it’s best to have a downpayment ready for an office space. Business can sometimes be unpredictable, so you need to make sure you can afford the space, even during slow months. This is why it is often the best choice to put down a large downpayment, so your monthly mortgage is lower. Having a smaller downpayment can lead to larger monthly expenses, which is usually undesirable.
When Your Team Outgrows Your Current Space
Many times, teams outgrow their current office space as they add new members. In this case, it’s best to buy a new office space quickly. A lack of space can hinder productivity and can cause frustrations amongst employees. So, when your team outgrows your current space, it’s time to look for a new one. For example, if you have an office that suits one dozen people, but you need a much larger team now, you will need a new space. While this can be a pain for business owners, it’s a sign of a booming and successful business.
Buying a New Office Space
If you would like the benefits of an office space or your situation matches the best times to buy, it’s time to start looking! However, deciding to get an office should not be done in a rush. You will hopefully be in this new space for a long time. So, pay close attention to the properties and diligently look for the perfect choice. We always recommend using a commercial real estate broker for help with your search.
If you are in the Salt Lake City, Utah area, our team can help you! Contact us today so we can find the perfect office for your business.
Owning a restaurant is an exciting business opportunity and it can generate great income over the years. As easy as it sounds, purchasing a restaurant space is an important task and it should be done carefully. Additionally, there are some factors you should take into consideration when you want to buy a restaurant. Proper planning of a restaurant is crucial so you can save on costs and make more profit. So, in this blog post, we cover what to consider when purchasing a restaurant space.
The Size of the Space
The size of the restaurant is definitely a key characteristic to look at. The square footage you need from a space depends on the type of restaurant you plan on opening. There is a rule of thumb we call the 60/40 rule. When it comes to restaurant size, this rule can make your space much more comfortable. This rule states the dining section of the restaurant is meant to comprise or occupy most of the space in the restaurant. To be specific, about 60 percent of the space should be allocated to dining, while the remaining 40 percent can be shared between the kitchen, storage, and other parts of the restaurant.
An example of spacing like this would be a restaurant that has about 7000 square feet. In this situation, 60 percent of the space (4,200 square feet) would be allocated to dining while 40 percent of the space (2,800 square feet) would be allocated to other sections, such as the kitchen or storage rooms.
The Style of the Restaurant
The style of your restaurant will go a long way in determining whether or not your restaurant will be successful. Unfortunately, there are many cases where the restaurant owner overlooks this factor, and they have to shut down. While the style might not be the entire reason they shut down, it could certainly be a contributing factor. So, your space’s style should be in line with the cuisine that is served at your restaurant. When a person goes to eat at your restaurant, they should feel as though they stepped into a different country, a classic American restaurant, or something else that would be appropriate to the style of food being served.
A typical example of this is when you go to a Chinese restaurant to eat a meal. In a case like this, the restaurant should have a classic Chinese culture feel. The space shouldn’t feel like an American sports bar or a Mexican cantina. It should feel as though it matches the menu being served. This can be accomplished through architecture or decorations. The style of the space truly matters when purchasing a restaurant location. Don’t overlook this factor.
The Parking Options
The parking ratio of a restaurant is another important factor that should be considered when purchasing a restaurant space. The main objective of a parking lot is to give customers a space to leave their cars when they visit the restaurant. Ensuring they have space to park will encourage them to come inside. How many times have you had to leave a restaurant because there wasn’t enough parking for your car? This is why it’s so important to provide enough parking at your restaurant. A typical parking standard for restaurants includes the following:
- <2,500 square feet of building territory – one space for every 100 square feet of a building region
- >2,500 square feet of building territory – one space for every 75 square feet of a building region
- If you have a food truck or a walk-up restaurant where customers don’t stay, allow one space to every 275 square feet of the building.
Having ample parking will ensure more customers come inside and can park their cars comfortably.
The Cost of the Space
When looking for a building to purchase, you must save money where you can. Purchasing commercial buildings can be costly, so look for ways to cut costs to be more profitable. When looking for ways to get a great building for less money, you can consider:
- Locating your restaurant in the suburbs: This is certainly a good idea if you plan to minimize costs. In the suburbs, you can find less costly buildings available for purchase.
- Locating your restaurant in an older building that you can renovate: The idea of doing this is brilliant. It saves costs and other expenses that you would have been burdened with if you had to purchase it. Locating your restaurant in an older building will give you the leisure to purchase other things to make your restaurant look way better.
- Locating your restaurant in a low tax neighborhood: Doing this is cost-effective. When a restaurant is located in a low-tax neighborhood, it saves money because the taxes you pay will be much lower. This can save you thousands of dollars every year. So, find a low tax neighborhood or ask your broker to refine their search to these areas.
Purchasing a Restaurant Space
When purchasing a restaurant, it is advisable to do proper research about the place you want to use. You also need to look for ways to reduce costs. Reducing the cost of your restaurant does not mean your space should be of low quality. It should still look great and feel welcoming to your customers. It is important for you to always have your customers in mind so they are more likely to visit your restaurant often.
If you are ready to purchase a restaurant space in the Salt Lake City, Utah area, please contact us. Our team can help you find the perfect space for purchase!
Many business owners find themselves considering the pros and cons of buying a warehouse. The conversation around buying vs. leasing a warehouse is a common one for business owners because of these pros and cons. Whether or not buying a warehouse is a good idea for a business owner seems to be up in the air. However, we believe it truly depends on your individual situation. In this blog post, we provide insights that will hopefully help you decide whether or not you should buy a warehouse.
Buying vs. Leasing a Warehouse
When you are the owner of a large business that sells products, you likely need a warehouse to operate effectively. Warehouses have the proper equipment and space for you to operate your business and fit your employees. You may need space to store and ship merchandise. Or, you may need a space to actually manufacture products to sell to customers. No matter what it is, selling a large number of goods requires a warehouse to hold them at some point. If you have come to this realization, you may be wondering if the right move is to buy or lease a warehouse. Below, you will find the pros and cons to consider.
Buying a Warehouse
Buying a warehouse is a very big decision for a business owner to make. When you buy a warehouse, it needs to be because you plan on remaining in the space for a long time. Warehouses are a very big investment to make, which means your finances need to be in order before you apply for a loan. However, this doesn’t mean buying a warehouse isn’t a good idea. In fact, it’s a smart investment if you are in the position to make it.
- You own the warehouse, which enables you to operate freely.
- Your property will likely appreciate in value, which earns you money when it’s time to sell.
- You aren’t paying more than what the property is worth, as the landlord needs to make a profit.
- When you are ready to move, you can lease out the space if you want an extra stream of income.
- You don’t have to worry about your landlord increasing the cost of rent before you renew your lease.
- When you own a warehouse, you are responsible for everything, including the roof, utilities, and machinery if anything ever breaks. With renting, these responsibilities are on the landlord.
- Business success is somewhat unpredictable, so you may grow out of your warehouse, or become too small for it.
- You will most likely need to take out a loan to pay for the property, so you need to have your credit score and finances in check before applying.
Leasing a Warehouse
Buying a property to operate out of isn’t as common as you may think. Most businesses operate out of a leased warehouse space, in which a landlord owns it as an investment property. In fact, a large majority of the skyscrapers you see in downtown Salt Lake City are owned by landlords and leased out to businesses. For many businesses and their owners, it just makes sense to lease out a space. Many people don’t want the commitment of owning a property, which is completely understandable. After all, when you buy a space, it is likely because you plan on spending several years at the location. This is very forward-thinking for many business owners, as they plan for their businesses to grow quickly.
- You aren’t tied to the property for decades, or have to go through the selling process.
- You are not necessarily responsible for any issues on the property like air conditioning repairs, pipe repairs, or flooring.
- If your business is booming, you can decide not to renew your lease so you can move into a larger property.
- You will have to move your entire inventory, employees, and machinery to a new location if you don’t renew your lease.
- Your landlord can increase the cost of rent before you renew your lease, which is very common.
- You won’t make a profit on your investment if the property appreciates in value when you occupy it.
- You are somewhat limited to how you customize the space or operate in it depending on your contract’s terms and landlord’s wishes.
Buying vs. Leasing a Warehouse: Which is Best For You?
We hope this blog post helped you develop an opinion on buying vs. leasing a warehouse for your business. Go over the pros and cons, and consider which is best for your plans and business. If you have any questions about whether you should buy or lease your warehouse, feel free to contact us. We would be more than happy to help answer your questions. Our team helps many business owners with finding the perfect commercial property. From our expertise, we can put you in touch with a property and the ideal contract for your commercial needs.
Restaurants are a staple in most cultures and countries. Across the world, family, friends, and co-workers sit down and enjoy meals together in these businesses. Although it can be difficult to stay open at times, as long as you have great food and a great location, you will likely see success. If you want to be a restaurant owner, you probably already have the amazing recipes down. But, what about the fantastic location? If you don’t know what to look for in a restaurant space, don’t worry. In this blog post, we are going to cover five qualities to consider when purchasing restaurant space, so you can serve food in a fantastic building.
What to Consider When Purchasing Restaurant Space
The building you purchase will have a large impact on how your guests feel. If the place is dark, dingy, and characterless, they may not feel compelled to visit your restaurant again. And, as you likely know, repeat customers are what makes a business thrive. So, when purchasing a restaurant space, you will want to be very considerate of your selection. Take a look at the factors below before signing off on a property, so you are more likely to succeed with your restaurant.
1. The Size of the Space
An incredibly important factor is the size of the building you are considering to purchase. The size of a building will determine how many people you can serve at once and how many staff members it can hold. If the space is too small, people may not come if they want to avoid a long wait. On the other hand, if a space is too big, it may be wasted square footage. However, if you find the perfect building and the finances work, you can always turn extra square footage into a party room that people can rent out or for large groups to enjoy. But, do avoid getting too small of a space, so your guests and employees don’t feel cramped.
2. The Feel of the Building
One of the most important aspects to consider is the architecture of a building. Some restaurants were built with a specific cuisine in mind, so the architecture suits a certain style. For example, you have likely seen Mexican restaurants that have a classic Mexican architecture look. Purchasing restaurant space that matches the architecture of your cuisine is a great idea. When it does match, it will give customers a better experience when they dine with you.
To choose a building with the right feel, consider the types of dishes you will be serving. Will it be Italian food? If so, choose a modern building with lots of greenery to suit your menu. Once the space is yours, you can hang Italian art or even have an Italy-inspired mural painted. On the other hand, if you are going to be serving American dishes, consider a classic building with bright colors and a simple design. Then, you can decorate it with pictures from the 80s to give it a classic American diner feel.
3. The Location of the Restaurant Space
Something else to consider when purchasing restaurant space is the location of the building. For one, an easy to access building is very important. When your customers can’t find the building, or they don’t see it regularly, they will lose the incentive to stop by for a meal. If your customers have to drive far away to visit your restaurant, you may see less foot traffic. So, pick a place that is close to your target market and that is easy to find.
Yet another factor when it comes to location is the density of restaurants in the area. If there is a missing cuisine that you can fulfill, then it is a great spot. However, if there are already three other successful restaurants with the same cuisine, it may not be a smart decision to try to compete with them. The perfect location will be an area with other restaurants, but missing your cuisine style. Or, it will be an area near residential areas or shopping, with minimal restaurant options.
4. The Monthly Cost of the Building
One of the primary reasons restaurants fail is because their finances just don’t work. It can be incredibly difficult to predict which dishes will do best, how to price them, and how to make enough profit to afford the monthly payments. So, it is best to keep the monthly cost of a building as low as possible. Some ways to keep costs low is to ensure the building is in a ZIP code with a low cost per square footage. Also, if you can find a building that just needs a few cosmetic upgrades, this can be a great way to save money.
5. The Parking Options For Guests
Another factor to remember, and one that many people forget to consider, is parking options. Parking is crucial to ensure as many guests as possible can visit your restaurant. How many times have you decided to go somewhere else because there was no parking available? Chances are, you have several times. So, try to find a location with great parking options for guests. Remember, the whole parking lot doesn’t have to be standard parking options with marked spaces. A grass or gravel lot behind the restaurant will do the trick as well, or you can get this paved later on. As long as your guests can park safely, it’s a great choice!
Purchasing Restaurant Space in Salt Lake City
We hope this list helps you when purchasing restaurant space! Our team is so excited for you to start your own business and give your community amazing food. If you need help in the Salt Lake City, Utah area, feel free to contact our team. Our expert brokers can help you find the restaurant space of your dreams. We can also help you know what to look for and will keep you informed on what you need out of your space.
Purchasing industrial warehouses as investment properties is typically an excellent idea. Despite the uncertain circumstances caused by the coronavirus, industrial real estate still saw great success. Companies are always in need of warehouse space, no matter if they do in-person or online operations. With that being said, industrial warehouses are almost always occupied by a tenant, which means purchasing one is a great idea. In this blog post, we are going to explain what to look for in a warehouse to ensure it is a great investment.
What to Look For in Industrial Warehouses
When it comes to purchasing an industrial warehouse, the most important factor is location. It should be in an area where the tenant’s employees can commute to easily. This means near a larger city that has a significant population size. Also, it should be close to a major highway, so trucks can get to the loading docks with ease. This will encourage higher productivity rates as the truck drivers can pull off the road, load up the trailer, and get going again. Additionally, this can save your tenants excess costs, and can potentially get them more customers when they see their amazing productivity rates. When your tenants have success at your location, they will be more likely to stay in your space for several years.
The Size of the Industrial Warehouse
Another very important factor is the size of the industrial warehouse. Of course, you don’t want your warehouse to be too small to fit your tenant’s merchandise and employees. Or, you don’t want them to grow out of it within a year. At the same time, you don’t want your warehouse to be too large for your products and employees. This is why choosing the right size warehouse for your needs is so important.
To choose the correct size of your warehouse, you will want to take a look at which industry you would like to target. When doing this, you should consider what the booming industries are in the city or state you are purchasing a property in. Once you choose an industry, you will need to look at the average warehouse square footage needed. Your commercial real estate broker should be able to tell you this, and there are online resources to find this information. Then, look for warehouses that are around the same size, if not slightly larger. Being the option with the most space will prove to be desirable among tenants.
Consider Buying an Industrial Warehouse With an Office Area
Many of our clients choose to purchase industrial warehouses that include an office area. This is a highly valuable feature that many property owners do not think of. In almost every warehouse, there is likely a management team that handles business activities concerning finances, employee management, employee records, and more. This management team benefits from being at the same location as their employees, rather than having to drive from another location. When your property features an office area for the managers, it is much more valuable. You will save the tenant from renting out a second space, and you make it easier on the staff. Fit Small Business has an excellent layout on their website including an office space example.
Cost per Square Footage
Another important factor when purchasing industrial warehouses concerns budgeting. The cost per square footage depends on the property’s condition, as well as its location. There are many markets in which industrial warehouses are booming due to the low cost per square footage. However, there are other markets that are failing because of the price of buying and leasing industrial space. For example, in San Francisco, California, you can find industrial warehouses for sale for upwards of $320 per square foot (in mid-2020). However, in Memphis, Tennessee, you can find similar listings for under $20 per square foot. Clearly, in Memphis, you would have much more wiggle room to make a profit off of your tenant’s lease payments. In San Francisco, you would likely struggle to find a tenant who is willing to pay what it takes for you to make a significant profit.
Our office is in Salt Lake City, Utah, and we have many industrial warehouse listings. This post is being written in mid-2020, and we are seeing warehouses be sold at around $115 to $170 per square foot. However, these prices can go up and down depending on the market and seller, as do properties in other cities. But, as you can see, prices are subjective to the city and state you are in. So, be sure you take this into account before investing in industrial warehouses. You want to find a listing in a great area (which does increase the sale price), but also a listing that allows you to make a profit at a reasonable rate.
Purchasing Industrial Warehouses as Investments
At the end of the day, purchasing an industrial warehouse is typically an excellent investment. However, when you keep the factors above in mind during your search, you are much more likely to be happy with your investment. If you need the services of a commercial real estate broker in Salt Lake City, feel free to contact us. Our team would love to assist you and help you find a property that you can make a smart investment in.
For many businesses, the option of subletting a portion of their office space sounds desirable. From the money received, from the rent of the other business, it can help offset the cost of their own lease. However, the decision to sublease office space is not always as desirable as it may seem. In some instances, it is an excellent option, whereas, with others, it should not be done. Let’s discuss when you should consider subletting your office space and when you shouldn’t.
When Subletting Your Office Space is a Good Idea
There are many great reasons to think about letting your office space. After all, you can save a significant amount of money when you let another business into your space. Below, you will see some of these great reasons to welcome another business into your office space.
Have you recently downsized your business? Or, perhaps you have allowed some employees to work from home. No matter the situation, downsizing your on-site workforce can create a great deal of room. So, if you have enough room in your office space for another business to move in, consider subletting your office space. Even if you only have five to ten desks open, it may be the perfect size for a small start-up. Anything you make from their rent can help minimize the costs of your own space, which is very helpful.
When You Have a Large Amount of Extra Space
Many businesses decide to move into a larger office space that they can grow into. This is an excellent idea as it can save a great deal of money by avoiding moving the entire office later on. However, this can lead to office space that is not used. This can either waste money on rent, or you can sublease the space to another business. If you decide to sublease your extra office space, be sure to design the space to separate the two businesses. This means you should seclude the extra office space for the business that will be subletting your office space. Perhaps building a wall or setting up a temporary barricade can seclude the two businesses well.
When You Are Moving to Another Location
Some businesses grow out of their space before their lease is up. While this is a sign of a successful business, it can still cause a problem with getting out of your lease. An excellent option for moving into a large space early is by subletting your office space. Lease the entire space to another business while your business moves into a larger location. Although this does not get you out of paying for your office space, it should cover what you owe your landlord for the time being.
When Subletting Your Office Space is Not a Good Idea
Despite sounding like a great money saver or a way out of a small space, not every business should sublease their office space. There are some instances where it is not a good idea to do this. At the end of the day, if you are ever unsure about subletting your office space, it is a good idea to contact your lawyer. Have them look over your lease and the laws in your city to make sure you are following the laws and your contract.
If Your Lease Prohibits Subletting
Some landlords prohibit subleasing in their tenants’ leases. This is usually because they want to approve who is allowed in their building. While this is completely understandable, it can prevent you from leaving your office space. It can also cause you to waste money on empty office space. However, following the contract you have with your landlord is the most important thing. This way, you don’t have to face legal consequences or fees.
Your Business is Growing Quickly
As mentioned above, many businesses move into larger spaces with plans on growing into it. However, just because your space is too big now, it doesn’t mean you won’t grow into it within a few months. Take a look at the rate in which your business is growing to be sure you have enough time to sublease your office space. If you predict your business will grow into the space within a year, we recommend not subletting the space. This is because most businesses will look to sublease a space for six to twelve months. In this instance, it is best to hold off and embrace your growing business.
Your Business Handles Private Information
Perhaps you have plenty of space to welcome another business into your office. But, if your business handles private information such as bank account numbers, health information, or legal matters, it may be a privacy concern to have a business sublease form you. The privacy of your employees and your customers should be a top concern. So, be sure your business will have the necessary privacy if you sublease your office space.
We hope this is helpful, if you’re considering the idea of subletting. And if you’re ever looking for a new office location, or trying to find a tenant to fill your currently open office space, let us know! That’s something we can certainly help with!
Leads are one of the most important things for the success of a commercial broker. When your leads convert into clients or property sales, you will make more revenue for yourself. So, it is vital commercial brokers take steps to increase their lead generation. In this blog post, we are going to cover just a few ways to get more leads as a commercial broker.
Invest in a Quality Website
A website is one of the biggest lead sources for a commercial broker. When a website is high-quality, loads quickly, and looks professional, it can generate a majority of a broker’s leads. Although it can be costly to hire a website developer to put your website together, it will be well worth it. On your website, you can put information about your experience, your current listings, and even testimonials from your previous clients. Then, when prospects land on your website, they will be much more likely to generate a lead. Additionally, what you spend on putting your website together and the yearly cost for a domain is tax-deductible as a business expense. So, be sure to invest in this helpful marketing tool to get more leads.
Be Active on Social Media
Another helpful lead generation tool is social media. There has been an increasing trend amongst commercial real estate brokers using social media to promote their listings. Almost half of the world’s population has social media, which means it’s imperative for brokers to use it as a marketing tool. Social media presents a great opportunity to connect with people who are not already your clients and be on the top of their minds if they ever need your services as a broker. You can use hashtags, tag your location, and comment on others’ posts to increase your audience.
Facebook tends to have the highest return on investment out of all social media platforms. However, many commercial brokers prefer to use Instagram, as it is a photo-focused platform. With that being said, Instagram is a great platform to use to show off drone footage of a commercial building. You can also or go live to show an exclusive walk-through of your listing. Additionally, social media is completely free if you are not paying to boost your posts. So, this is a budget-friendly way to generate more leads for yourself.
Network at Local Events to Get More Leads
A classic way to generate leads is to attend local events. If there are any business-related events in your area, consider going to network. Introducing yourself and letting people know what you do can help you get new clients. Business owners or investors are typically a commercial broker’s target audience. So, when attending a networking event, you have access to a room full of potential clients. However, at these events, you don’t want to be too pushy. If someone expresses interest in using your services to buy or sell a property, then hand them your business card or give them your information. This is to ensure you appear as professional as possible, rather than appear as though you are only there to generate sales.
Ask Your Previous Clients for Reviews and Referrals
The recommendations from your previous clients can be very helpful for your business. If you have not done so already, sign up for some free business listing websites with review functions. Then, ask your clients to leave you feedback once your sale is over. After this, you can post their reviews to your social media pages or on your website. This will give you great credibility and will encourage people to consider using your services.
Consider Joining a Nationally Known Franchise
Another tactic to increase your leads as an independent broker is to join a widely known brokerage franchise. Being a broker under a large name, such as SVN, can boost your credibility greatly. Additionally, it can help you to get more leads as someone searches for a local franchise. Many franchises also have a marketing budget, in which they help their brokers get more leads. This is a route that many independent brokers decide to take when they are having challenges generating leads. However, if you enjoy working independently, this is not a necessary tip.
If you are in the Salt Lake City, Utah area and are looking to join a local brokerage franchise, feel free to look into SVN | Alta Commercial. We are accepting resumes from licensed brokers to see if they would be a fit in our office. Our team looks forward to hearing from you!
A common question people ask in the commercial real estate industry is “How do brokers get paid?” Although the payment to a broker is involved with every commercial real estate transaction, it seems many people lack clarity on the subject. Truth be told, the process of getting paid as a broker can get a bit complicated. The fact that commission rates can vary also contributes to the confusion around how brokers get paid. Whether you’re interested in becoming a broker one day or you’re thinking you might want to work with one, this blog post will explain how brokers get paid for their work.
How do CRE Brokers Get Paid?
What many people do understand is that commercial real estate brokers get paid based off commission. The commission is typically paid by the seller of the property, but the buyers of the property may also owe the broker a payment as well. Who pays the commission depends on who the broker is representing in the transaction. When representing both parties, both the seller and buyer will pay the broker a commission fee. If there are two brokers involved with the deal, they will split the commission between each other. However, the amount in which the broker is paid varies due to anti-trust laws.
Due to anti-trust laws, it is illegal to set a commission rate across a market or industry. This means the commercial broker and their client need to negotiate a commission rate before agreeing to work together. Negotiating a price for a commission can be great for both the client and the broker, as the costs of different properties vary greatly. Additionally, some properties are easier to find than others, which changes how difficult the broker’s job is. According to our partners at SVN | Southgate Realty, most commercial brokers get paid between four percent and eight percent of the sale price from the property. However, this may increase or decrease based on the complexity of the deal. So, be sure to consider how hard the broker will need to work when negotiating their commission rate.
How Does Commission Work?
In commercial real estate, a property can be sold or leased. The amount a commercial real estate broker earns is based on the price of the property. So, if the broker and the seller agree on a seven percent commission rate and the property purchased was $1,000,000, the broker would earn $70,000. However, if another broker was involved to represent the buyer of the property, the $70,000 would be split between the two.
For commercial real estate, because leases are typically paid on a monthly basis, there is a different way to calculate the commission of a broker. With leases, the broker is paid based on the length of the lease agreement and the monthly rate. For example, if a property is leased for three years at $15 per square foot, and it is 2,000 square feet, the lease value would be $90,000. We find this from 3 years x ($15 x 2,000 SF). If the seller and broker agreed on a seven percent commission rate, the broker would make $6,300.
Who Pays the Broker?
The person who usually pays the broker(s) involved with commercial real estate transactions is the property owner or landlord. Almost always, the seller or landlord will pay both brokers who are representing clients in the commercial real estate transaction. This is because the landlord wants to get the property off their hands and needs the help of the broker to do so. If you are looking to purchase a property, do not skip out on using a broker because you think you will get a better deal. Brokers are very resourceful, and you typically won’t spend any money on their services when you are buying the property.
Looking for a Commercial Real Estate Broker in Salt Lake City?
We hope this blog post cleared up any confusion you had about how brokers get paid. If you are looking to buy or sell a commercial property in Salt Lake City and need assistance from a broker, please feel free to contact us. Our highly skilled and experienced advisors will help you get an excellent deal and can answer any questions you may have. We always strive to make the transaction process as easy as possible for our clients. So, please feel free to reach out so you can work with one of our advisors today!
Do you have a commercial real estate property you would like to sell? If so, you have a couple different options for selling your property. In this blog post, we discuss your options and explain which one is best for you.
Ways to Sell Your Commercial Real Estate Property
There are two main options for you to sell your commercial real estate property. First, you can do it independently. Second, you can hire a commercial broker to help you do most of the work that comes with selling the property. Below, we explain how to go about these two options and what the processes entail.
Selling Your Commercial Real Estate Property Independently
Many people choose to sell their commercial real estate properties independently to avoid paying the fee of a commercial broker. Although hiring a commercial real estate broker isn’t free, the amount of work you will save yourself may be worth it. Selling commercial real estate is a full-time job within itself. Here are the steps people take when they sell their properties independently:
1. Find a Certified Inspector
Before selling your property, you need to get it inspected. A certified inspector will point out any damage or issues with your property that you need to fix before you sell it. Once you have had an inspector look at your property, you will need to fix any issues with they found. If you do not fix these issues, it will drastically lower the worth of your property, and people will be less likely to purchase it.
2. Find a Qualified Appraiser
When selling your property independently, you may have no idea what to list it for. There are so many factors that go into deciding a fair price for a property. This is where a qualified appraiser is very important. An appraiser is an expert who will evaluate your property and tell you what its market value is. From there, you will have a good idea of how much the property is truly worth.
3. Advertise Your Property
Once you have a set price, it is time for you to advertise that your property is for sale. This is one of the most challenging parts of selling a commercial real estate property independently. You may have to pay for advertising on social media, billboards, or newspapers. Advertising is crucial for people to gain awareness of your property and that it is for sale, so this step should not be skipped.
4. Hire a Commercial Real Estate Attorney
Once you have found a buyer, you will need to hire a commercial real estate attorney to write a contract for you. This will ensure the sale is legal and binding. They will also make sure you are protected as the seller throughout the sale process. Hiring an attorney can be expensive, but this is also crucial for selling your property, as your sale must be legal.
Selling Your Property with a Broker
As you can see, selling a commercial real estate property independently still requires you to hire people and pay fees. No matter what option you choose, you will need to hire an inspector to look at your property. When you hire a broker, after the inspection, all you do is give your broker the information they request, and let them do the advertising for you. Your broker will set the price at a competitive rate, ensuring you get the most for your property as possible. They will then show prospects your property for you, list it on their website, and will spread the word about your property. Then, when someone is ready to purchase it, a broker will usually have a contract ready for you. After the sale, you pay the broker for doing their work, and you are done!
Another consideration is that the longer you own the property, the longer you’ll need to pay for property taxes. If your own marketing process isn’t getting leads and finding a qualified buyer, the you could end up spending a lot more money because of waiting, then you would by using a commercial broker. Of course, these are generalizations. But, when you talk to a broker, you can get a better idea of what to expect in terms of costs and savings.
Broker or Independent?
The truth is, deciding between selling your commercial real estate property independently or selling it with the help of a broker depends on the amount of time you have. If you are already a very busy person, it is highly recommended that you hire a broker. This will save you a lot of time, and your property will likely be sold much more quickly. However, if you are experienced and good at selling commercial real estate independently, that may be the best option for you.
If you’re interested in using a commercial real estate broker to sell your property, please feel free to contact us. We help people in the Salt Lake City area buy and sell commercial real estate properties and would be more than happy to help you sell yours. Our goal is to make the process of selling commercial real estate property as easy as possible for our clients. So, feel free to reach out if you would like some assistance.