Anaheim Commercial Real Estate For Sale & Lease

Anaheim, in Orange County, CA, has a population of 336,265. This means it is the largest city in the count by population, and the 10th in the entire state. In terms of land area, it is the second largest city after Irvine. It is known the world over for its convention center, sports theme, and, of course, theme parks. The city was founded in 1857 by German families and was incorporated on March 18, 1876. It quickly become an industrial center, before Disneyland Resort opened, in 1955.

The city is incredibly diverse in terms of communities and neighborhoods, including some high profile ones. In the downtown area, there are historic districts, a commercial district, and a redevelopment district. The city’s income is mainly based on tourism, with The Walt Disney Company being the city’s largest employer of all. The Anaheim Convention Center, where various national and international conferences are held, is also a main economic contributor.

Sixty three percent of the industrial space in Anaheim is provided by the Anaheim Canyon business park. It is the largest in the county. The county’s second largest business park, Anaheim Canyon, is home to over 2,600 different business and some 50,000 people work there. It is also home to major retail centers, including the Anaheim Resort, the Anaheim GardenWalk lifestyle center, the Anaheim Town Square, and the Anaheim Plaze.

Anaheim Commercial Buildings for Sale & Lease

Anyone looking at setting up business in Anaheim could consider leasing or buying commercial real estate (CRE). CRE is also incredibly popular with investors. There are pros and cons to buying, as well as to leasing. Either way, you are committing to a significant investment, which means that you do have to do a little bit of research.

Choosing Between a Lease or a Purchase

As a rule of thumb, investors will always buy CRE, as will those who intend to remain in the same location for at least seven years. However, when deciding to pay, you are tying up a large chunk of money that could also otherwise be spent on expanding the business. And since very few businesses, particularly new ones, know where they will be within seven years, the decision whether to go for commercial buildings for sale or lease becomes even more complex.

For many, the consideration is down to cost. However, that is a simplistic view, particularly since costs go above and beyond monthly mortgage or lease payments. Leasing and buying each have their own tax advantages as well, for instance. Each option also has other associated costs, such as insurance, maintenance, and more. When you buy, you will need to pay a down payment, sometimes as much as 30% of the purchase price, and you are always worried about depreciation. That said, the property could also appreciate, and you will have a lot more equity and assets in your name.

Anaheim Commercial Property for Sale

A commercial property for sale should always be seen as an investment, whether you purchase it to run your own business or to rent out to others. To determine whether it is a good investment or not, the following trends may be important:

  • Multifamily properties usually cost around $202,170.79, which is a 0.0% rise compared to the last three months, and a year on year 7.1% rise. This is all lower than the county, metro, and state prices.
  • Office properties usually cost around $311.66 per square foot in the entire county. This is a quarterly decline of 0.2%, although a 11.3% year on year rise. The average rent per square foot per year in Anaheim is $20.55, slightly lower than the county average. This is a 2.4% increase over the past three months, but a 3.3% decrease over the past year.
  • Industrial properties usually cost around $189.98 per square foot, which equates to a quarterly rise of 4.4% and a year on year rise of 24.6%. This is higher than the rest of the state, but lower than the county and metro area. If you own industrial property, you can usually charge rent of $11.91 per square foot per year, which is a 2.6% decrease over the past three years, but a 12.3% increase year on year.
  • Retail properties usually cost around $408.88 per square foot in the county, which has been stagnant over the past quarter. Year on year, however, this is a 14.5% rise. The average yearly rent per square foot is $21.82, which is 1.4% increase over the past three months, but a 0.8% decrease year on year.

Anaheim Commercial Property for Lease

Making the decision to lease a commercial property instead of purchasing can be a very good one, but it also means you have to do your homework. There are many differences between renting a commercial property and a residential property, and that is where people often make a mistake. Even finding a commercial property for lease is very different. As a result, you must get a broker on you side who can help you find one, and you must make sure that he or she is a tenant broker rather than a leasing agent. Usually, the broker is paid for by the building owner either way, but leasing agents work on their side, whereas tenant brokers work for you. What they aim to achieve is to make sure that get the best possible deal. In return, they may present you with a representation agreement to sign, for which you will then receive a discount. If you are looking for larger properties, it is not recommended that you sign this.

Once your broker gets to work, you will be able to find a property that you like. After that, you will need to start the negotiations. You will be presented with an initial leasing contract that heavily favors the property owner. Their hope is that you simply sign this without negotiating, but you are under no obligation to do so. Your tenant broker should be able to help you make alterations to the original contract so that you end up with something that is mutually agreeable. You can negotiate every element of the contract, but the most common elements include:

  1. Your personal guarantee, which means that you agree to be personally responsible for the monthly lease if your business is not able to afford it anymore. Make sure that this guarantee is only in place for a specific period of time.
  2. What you pay. In many cases, property owners will charge you a fee per square foot, but they will choose the square footage of the building as a whole, not the actual usable space. Hence, you must take your own measurements and renegotiate what you actually pay.
  3. Your lease type, which can be a percentage lease (a monthly lease amount + a percentage of your profits), a net lease (a monthly lease plus expenses), the triple net lease (a monthly lease, plus common area maintenance fees), and the gross lease (the most costly but also the most tax advantageous).
  4. The length of your contract. As stated, if you intend to stay for more than seven years, buying is likely to be more affordable. Try to keep the length of year lease as short as possible as well. At the same time, you need to have clauses in place to ensure you won’t be out of a business the minute your lease ends.
  5. The possible rent increases, whereby you negotiate by how much the rent can increase, and which consumer index this is based on. Putting a cap in place is always a good idea.
  6. The maintenance responsibility, which is not always the role of the landlord as it would be with a residential property. If you take responsibility for maintenance, this should be reflected in your contract.
  7. What you can do with the building in terms of renovations and alterations and who will be responsible for the expenses. Usually, if you have signed a 10-year lease or longer, the owner will pay for the renovations as well as discounting your monthly lease for the duration of the renovation work.
  8. Your rights to change the facade of the property and how you can advertise yourself. If the building is historic, for instance, you may not be allowed to make any changes to the outside of the building.
  9. Whether you can sublease should your business contract while you are still tied to the lease. This will enable you to continue to meet your financial obligations under the lease. You usually cannot sublease for a profit, however.
  10. Which exit clauses are in place if you do go out of business.
  11. Whether, if you sell your business, you can transfer the lease to the new owner.
  12. Whether any clauses are in place to either build on nearby stores (co-tenancy agreements), or to prevent competition from taking your foot traffic (exclusive use clauses).

Last but not least, consider your security deposit. In all lease agreements, these deposits have to be in place and they are returnable, so long as the property is in good state, when your lease ends. The deposit, however, should be reasonable and certainly not exceed the price that you would pay for a mortgage deposit should you want to buy it.