Purchasing Commercial Real Estate in Philadelphia
Commercial real estate investments often involve longer lease terms, more sophisticated tenants, and higher return rates. Commercial real estate investors who deal with large companies and corporations often see their returns increase and their commercial properties’ income grow.
But buying commercial properties isn’t without its own set of challenges.
Keep reading for an overview of Philadelphia’s commercial real estate market and what you need to consider before buying commercial real estate properties.
1. Why Are You Investing in CRE?
Firstly, it’s important to ask yourself why would you want to invest in Philadelphia’s commercial real estate market. Is it because you’re hoping to make money off it? Or maybe you just enjoy the idea of owning your own business?
Whatever the reason, if you’re thinking about investing in commercial real estate, you should know what you’re getting into before you start buying properties. If you’re completely new to the world of commercial property investment, you may be better off taking things slowly and educating yourself first.
It’s important to do this before you contact listing agents of commercial properties to buy them. The worst mistake you could make right now would be locking yourself into a bad deal that you can’t get out of. After you’ve established the “Why” and feel confident enough to continue, you’re ready to move on.
2. Research the Property Types That Interest You
There are several different kinds of properties on the commercial real estate market, including:
- Multifamily (apartments)
- Office space
- Multi-use properties
- Industrial properties
- Retail properties (including restaurants)
- Hotels & other lodging properties
- Commercial land
Before investing, take some time to research each type of investment and decide which ones appeal the most to your personal interests. Maybe you like buying multifamily homes that house hundreds of people. Or maybe you like buying commercial real estate that could become the new headquarters for America’s next big corporation.
Regardless of whether you’re buying a rental property or flipping houses for profit, knowing which types of properties interest and excite you the most is essential to begin your commercial real estate investment career.
3. Research Philadelphia’s CRE Market
Commercial real estate investments in the suburbs and metropolitan areas of Philadelphia offer many business development options, including industrial properties, warehouse space, office buildings, and more.
There are search tools you can use to explore available commercial real estate available on the Philadelphia market. Each listing includes details about the property, including:
- Property type
- Square feet of the building
- Lot size
- Price of property
- The listing agent
Do your research into Philadelphia’s commercial real estate market before you get started so you know which building specs suit your goals.
4. Find a Good Location
Many of Philadelphia, Pennsylvania’s suburbs are located near major transportation hubs, which provide both you and potential customers easy access to commercial real estate as well as numerous markets. Location is one of the most important factors when choosing a commercial property.
So, important to choose a property that’s convenient to local markets and centers of activities to help your potential tenants live and/or work in your property. When choosing between investing in commercial property in Philadelphia and its neighboring suburbs, you’re most likely going to want to consider the popular attractions nearby. These include Rittenhouse Square Park, the Franklin Institute, Spruce Street Harbor Park, and Center City.
5. Contact Listing Agents
After choosing which commercial real estate investment opportunities you want to pursue, contact the listing agents of the selected deals. Work out the details of the deals and then establish clear expectations for all parties.
You should always ask as many questions as possible about the property. This gives you a clear idea of whether you should buy it or leave it. You should also clearly communicate your wants and make sure that you know how you plan to communicate during the negotiation process.
If you can, work with just one agency. Most agencies expect exclusivity when dealing with them. If this applies to you, then do not deal with any other agency until you’ve worked out an agreement with the current agency. You can still find another commercial real estate property that you’d like to view.
Just make sure you don’t call the office of the listed property, but instead, call the office of the agency you’re currently doing work with. If you’re working with multiple agents, it might be best to stick with just one agent at first. Otherwise, you could end up creating too much confusion for yourself.
Summary: Investing in the Philadelphia Commercial Real Estate Market
In all, there are many considerations to take when looking to purchase commercial real estate property in Philadelphia. Take your time to make sure the process goes smoothly. Figure out the ‘why’ aspect of investing in commercial real estate. This will give you a vision of your goals.
From there, dig into the various types of properties that will suit your needs best. Then you can focus on researching the Philadelphia market and where to buy in Philadelphia. From there you will have a solid understanding of what will work best to communicate your needs with listing agents.
Brotherly Love Real Estate is a professional homebuyer in Philly. Our team purchases commercial property throughout the city. If you need to sell a property quickly contact us today for your FREE valuation and cash offer.