Three Considerations Before Buying Commercial Real Estate

18 August 2018
 Categories: Construction & Contractors, Blog


There are many things to consider when looking to buy a commercial space for your business or as a real estate investment. Depending on the type of business you plan to put in or attract, location will probably be high on the list of your concerns. Perhaps a more important concern should be the physical state of the building rather than the location. Here is what you need to know before putting in an offer.

Be Prepared To Pay For Many Inspections

Large commercial buildings, whether a multi-unit office space or a warehouse, have a lot of components to keep in good working order. For example, many commercial spaces have flat roofs with a lot of surface area. Replacing a roof on these buildings can be very expensive.

The heating and cooling system is another area that can be costly to not only operate, but also maintain, repair, and replace. Many older buildings have boiler systems, which means the average maintenance man likely won't be able to handle it for you should any problems arise.

Before buying any commercial real estate, have each of the major areas inspected. This includes the plumbing and electricity systems; the roof; the foundation; and the heating, ventilation, and air conditioning systems.  If any of the inspections uncover major problems, you may want to adjust your offer accordingly or simply move on.

Consider Environmental Contamination

This is one area of your due diligence you don't want to skip. The average person can't tell simply by looking at a building if there are any environmental contamination concerns from previous tenants or owners.

For example, the dry-cleaning chemicals that were used in one-hour dry cleaning establishments next door may have had tanks that were leaking into the surrounding grounds and eventually the water supply. Previous commercial flood damage could lead to black mold, which needs to be professionally fixed. Old gas stations frequently require major cleanup before anything new can move in, which is why those buildings often sit empty.

Consult a professional service skilled in environmental site assessments and be sure to have good insurance if you decide to buy. If you fail to do this, you may find yourself on the line for thousands of dollars in cleanup.

Know Your Building Materials

Older commercial buildings in particular have building materials made from asbestos. A warehouse that has asbestos flooring doesn't have to be fixed if everything else checks out, but you do need to be aware of its existence and the potential risk.

As long as the material is intact, such as in a floor, it poses no safety hazard. Asbestos that is used to wrap the boiler pipes or that is used on a "popcorn" ceiling is a different story, however. You would need to have a commercial asbestos abatement service come in and remove the offending materials.  If you are planning on remodeling the space anyway, thins may not be a big concern. For more information regarding this topic, visit a website such as