Any type of real estate transaction will involve an extensive due diligence process. However, there are some points unique to commercial real estate that can easily get overlooked by those entrepreneurs eager to close on a property. From zoning laws to safety compliance, keep reading for a list of the most important things to consider before buying commercial real estate.

1. Get Informed On All Applicable Zoning Laws and Building Codes

Whether you plan to rent out the space to subsequent tenants or use the building as your business headquarters, the whole point of purchasing a commercial property is to use the facility to make a profit. Nonetheless, it would be erroneous to assume that just because you own the building, you are free to use it for any type of enterprise you want. 

Many states, counties, and cities have their own unique building codes and zoning restrictions that may limit how you can use your building. For example, in Austin, TX you are not allowed to break lots into anything smaller than 5,750 square feet. In New York City, buildings under 45 feet in height cannot be taller than the width of the adjoining street. As there are countless unique regulations such as these based on area, it is important to have a clear understanding of what is and is not permissible in your location prior to closing on a property.

2. Location, Location, Location

Ever wonder why there are a dozen hotels within walking distance of each other a couple of miles from the airport? Or why there is a plethora of convenience stores and fast food restaurants right across the road from a high school?

It goes back to that age old real estate adage: location is everything.

When purchasing your commercial property, you have to be just as in touch with the area around it as you are with the property itself if you have any hopes of keeping traffic coming in. And it’s not just about what you see today. Keep an eye on future development plans, as bustling districts have a way of migrating over time as new developments arise.

3. Look for Energy Efficient Features

Energy efficiency is a primary consideration in all real estate markets in 2023 as people look to cut consumption and save on utility expenses. While savings may be modest for single family residences, you have a chance to add some zeroes to your monthly savings when it comes to commercial properties that span thousands of square feet. In addition to innovative PV and water harvesting features, be on the lookout for roof cover board, exterior wall insulation, radiant floor heating, floor-to-ceiling windows, and any other features that can improve r-value, decrease thermal bridges, and leverage natural sunlight to the fullest to guarantee you are purchasing the most energy efficient building possible. 

4. Prioritize Durable Materials

Not only will commercial buildings see greater foot traffic than residential properties, but renters inevitably care less about taking care of your building than you do. Once their lease is up, the condition of the space is no longer their problem. Therefore, as a commercial building will experience elevated levels of use and abuse, it is critical to choose structures with the most durable building materials on the market. Some examples of materials that are long-lasting in the face of heavy use include epoxy terrazzo floors, steel siding, stainless steel fixtures, and solid surface countertops. 

5. Don’t Neglect Curb Appeal

People often equate curb appeal with a white picket fence and the perfectly manicured suburban lawn. However, curb appeal is just as important for commercial buildings. There are countless studies showing that people perform better when they take pride in their workplace, so having a cold, gray commercial high-rise is not the best way to put a smile on employees’ faces when they arrive at work each day. In addition to exterior landscaping, look for ways to utilize decorative screen panels in front of otherwise drab buildings or add a modern brick cladding system to provide some warming texture to the building’s facade.

6. Safety Is a Top Priority

Although it is nobody’s favorite topic to discuss, commercial property owners must constantly be aware of lawsuits and liability. Therefore, when shopping for commercial real estate, it is crucial to be on the lookout for red flags that may come back and haunt you as a property owner. Is the facility ADA compliant? Are there sufficient outdoor drainage grates to prevent standing water and slippery surfaces? Does the building have an adequate fire prevention system? 

Don’t Overlook These Key Considerations When Buying Commercial Real Estate

Purchasing a piece of commercial real estate requires a handful of special considerations that may not apply to residential transactions–many of which can prove to be costly if overlooked. By using the pro tips listed above, you can put yourself in the best position to be fully satisfied when closing on your commercial property. 

Sam Willis is a freelance writer that loves sharing his knowledge and expertise on commercial real estate. He lives in Atlanta, Georgia where he enjoys spending time with his wife and researching real estate trends in his free time. Sam’s work as a freelance writer can be found on Building Product Advisor, a new construction industry resource launching in the New Year.