There is still a lot of speculation about the future of commercial property in the U.S. Many business owners wonder about when and how to buy commercial property in order to make the most of the real estate market. Is this a smart time to steal an incredible deal to house your business, or could it crush your company?

The Pros of Buying Commercial Property for Your Business

Could buying commercial property turn your business into the next Google-sized success story?

There are many advantages for businesses buying commercial real estate to house their companies. Many do it simply to avoid rising rents. This means improving the ability for forecast financials and maintaining a competitive edge over rivals who may be disrupted by moves or who have to raise prices to make ends meet. Others do it as an investment, which can grow in value or even provide additional, diverse sources of income. However, one of the most powerful benefits that is often overlooked is how much easier it can be to sell a business when real estate is involved. It will be much easier for prospective buyers to get financing if they are buying both your business and real estate, which can result in being able to ask for more money. Look at Google. It has been on a commercial property buying spree for the last two years, including a $100 million purchase in Mountain View, CA and their whopping $1.9 billion acquisition in New York in 2010.

Could Buying Commercial Property Crush Your Business?

Google might be buying up commercial real estate, but Facebook has been in the headlines for several high profile leases. and seems to prefer the flexibility it offers. Certainly, if buying commercial property means putting a strain on working capital or wipes out reserves, it could put your company in a very vulnerable position. You definitely shouldn’t buy commercial property if it could limit your ability to take advantage of new opportunities for lack of liquidity. If you can rent for considerably less than buying, and you can lock in a long-term lease in a building that you are confident will fulfill your needs for the next 10 years, then renting may be the wisest choice. Just make sure that your landlord is in a good financial position as you might find it hard to conduct business without lights and water! Plus a lack of security could see your office equipment disappearing on the back of a pickup truck.

Is Now the Best Time to Buy Commercial Property?

Despite ongoing debate about whether the market is headed up or down in the next few months, there is no question that there are many incredible deals available. Commercial landlords may be offering leases at fire-sale prices with months of free rent and other perks, but buying right now definitely holds a few golden nuggets too. Struggling businesses and strategic defaulters who have seen their values drop present excellent targets for those who want to scoop up bargains. Plus, mortgage rates are low, and in a buyer’s market, you will certainly be in a better position to command the terms you want.

The bottom line is that even if there are small fluctuations in the market in the near future, you are still buying at an optimal moment with great appreciation potential over the next decade. If you aren’t planning on selling or moving your business anytime soon, then you really have nothing to loose, especially as many commercial mortgage loans do not require personal guarantees.

What to Look for if You Buy Commercial Property

If you’re wondering how to buy commercial property, keep these important factors in mind as you hunt for an appropriate business space:

• Is there room for your business to expand?
• Check zoning limitations.
• Is it in a growing economic area and will there be an influx of population?
• Is the property in a highly trafficked location?
• Beware of deferred maintenance.

Perhaps most importantly, can you buy a commercial property that already has other tenants so that you get your own space for free, and the building will pay for itself?