The Arizona commercial real estate market experienced significant growth in 2019, which has continued into 2020. With an average of 300 new residents moving into the state daily and a thriving business culture, both the residential and commercial real estate markets are competitive. Under these circumstances, it can be tempting to take any commercial property you can get as soon as it comes up in the listings. However, whether it’s for investment or your business, it’s crucial to take your time when selecting commercial real estate for purchase.
The Pressures of the Arizona Real Estate Market
Arizona’s commercial real estate industry saw an average GDP growth of 3.2 percent in 2019, and this growth is continuing in 2020. With the increasing population, the labor pool is growing, and business and office spaces are filling up. According to a recent report, over the last two years, Phoenix has witnessed “rental rates rise 20% from $28 full-service gross per square foot annually for Class A office space to $40 full service gross.” With high demand and commercial rents are going up, it is a landlord’s market. These pressures, coupled with the fact that there is limited commercial space, can make today’s buyer feel powerless to negotiate or hold out for the right property.
Determine What Matters
When buying commercial real estate, it’s essential to have a sense of what is most important to you before you begin looking for property. If the purchase is for investment, how do you expect to see a return? Are you planning on leasing the space or re-selling? If you are buying to start a business, does the location suit your needs and reach your customer base? Will your employees be comfortable and work well here? Is the property capable of meeting your long-term needs? Is the location worth the price? By knowing beforehand what the property must have in order to be right for you and your circumstances, you can avoid making the wrong buy in a competitive market.
Take Your Time Anyway
Whether you are buying for an investment or to open a business, your commercial real estate venture is about the long-term. If you rush to purchase a property without doing your due diligence, you could end up with something that doesn’t fit your business purpose. Even worse, you may later find that a hastily purchased structure has significant environmental or structural defects. It’s also crucial to work with an experienced Arizona real estate attorney throughout the process so that you can identify any issues before the purchase contract is signed. Your counsel will be able to help safeguard your interests and assist you in evaluating the property during every stage of the transaction.
Laura B. Bramnick is an experienced Arizona real estate attorney who has the expertise to help you evaluate and navigate your commercial real estate transaction. If you are seeking an exceptional, client-driven real estate lawyer in Scottsdale, Phoenix, Sedona, and throughout the State of Arizona, contact Laura B. Bramnick to schedule your consultation.