Coto de Caza Commercial Real Estate for Sale & Lease

Coto de Caza means “game preserve” in Spanish. It is a census designated place (CDP) in Orange County, CA. According to the latest census, some 14,866 people lived in the guard gated community as of 2010. Within the CPD, you will find around 4,000 homes. It is one of the county’s most expensive and oldest master planned communities. Development first started in 1968, with developers aiming to create a hunting lodge. This lodge is still there and is called the Lodge at Coto de Caza. In 2003, the community was finally completed. To this day, however, there are still numerous undeveloped lots.

Most of the community is tract housing, and you will also find a number of custom constructed properties off the main streets. Within Coto de Caza, you will find the 355 acre rural community of Los Ranchos Estates, where there are 75 custom built homes. This estate is a separate community, also private, although it shares the Coto de Caza gates. It does, however, have its own housing association.

In terms of its economy, Coto de Caza is highly affluent. Unsurprisingly, therefore, it also has a number of commercial endeavors. The most famous is the Lodge at Coto de Caza, but there is also the Coto de Caza Golf and Racquet Club, as well as the Coto de Caza General Store. For shopping, however, most residents will travel to Ladera Ranch, Las Flores, Mission Viejo, or Rancho Santa Margarita.

Coto de Caza Commercial Buildings for Sale & Lease

There are, unfortunately, only a few opportunities available for business owners to lease or purchase properties. Again, this is because there are such tight controls on what does and does not get developed. Due to the CDP’s proximity to Las Flores and Rancho Santa Margarita, most small businesses look at opening up shop there. If that is something that would interest you, then you have an opportunity to either lease or purchase your property.

Deciding between the options for Coto de Caza commercial buildings for sale & lease is a very complex issue. There is far more to it than simply putting the monthly price of the mortgage and the monthly price of the lease side by side. Both have various associated costs, including the down payment on the mortgage (30% of the property’s value) and the security deposit on the lease (negotiable), maintenance and utility costs (may be paid by the landlord in case of a lease), renovation costs (may be paid by the landlord in case of a lease), insurance premiums, tax advantages and disadvantages, and possible returns (none in case of a lease, variable according to market fluctuations in case of a mortgage). This is why you need to take the time to really consider all your options before making a final decision.

Coto de Caza Commercial Property for Sale

One place to start with comparing your options, whether you want to run a business or make an investment, are trends in Coto de Caza commercial property for sale:

  • Multifamily properties in Orange County usually cost around $314,841.90, which represents a 0.7% increase in the last three months, and a 10.5% rise in one year.
  • Office properties in the county usually cost around $311.66 per square foot. This is a quarterly decline of 0.2%, although a 11.3% rise in one year.
  • Industrial properties in the county usually cost around $222.13 per square foot, which equates to a quarterly rise of 2.7% and a 10.9% increase in one year.
  • Retail properties usually cost around $408.88 per square foot, which has been stagnant over the past quarter. Year on year, however, this represents a 14.5% increase.

Coto de Caza Commercial Property for Lease

If you do want to lease commercial property, whether in Coto de Caza if you are lucky, or in the surrounding area, you will suddenly find just how complex this is. Small businesses often simply do not have the opportunity to purchase due to the 30% down payment that is usually needed, which is money most don’t have or, if they do have it, they need to grow their business. Unfortunately, even leasing isn’t a straightforward endeavor.

Get a Team of Professionals

A lease is a complex, lengthy, and expensive financial construction. It is very important, therefore, that you take every advantage and disadvantage into consideration, and that you know how to get the best possible deal. Unless you have a background in commercial real estate, this generally means building a team of professionals around you. At the very least, this should include a lawyer, who will make sure everything you do is above board, and an accountant, who can make sure that you don’t pay over the odds and that you can actually afford what you intend to do.

Looking for a Commercial Property to Lease

Once you have your team around you, it will be time to start looking for Coto de Caza commercial property for lease. Commercial real estate is very different from residential properties, which is why you will need a broker. The good news is that the landlord generally pays for the broker fees. The bad news is that this is yet another area that is not without its own complexities. There are two brokers that you can work with, the first being the tenant broker. Tenant brokers care about your best interests, but they also want you to sign a representation agreement. This means that you can only view and lease the properties that they actually have on their books, potentially limiting your options. The second option is the leasing agent. And while you can work with as many leasing agents as you like, therefore ensuring that you can see all the available properties, leasing agents work on behalf of the landlord, so they will not help you to get the best possible deal.

What to Negotiate On

Getting the best possible deal is an important issue because another vital difference between commercial real estate and residential tenancies is that you can negotiate on virtually every element of your contract. Residential tenancy agreements are set in stone, and you can either agree to them or not. Commercial real estate leases, however, need to be mutually agreeable. This is why it is so important to have the lawyer and accountant on your side as well. Just some of the points that they can work on are:

  • The length and extent of your personal guarantee
  • How much you have to pay each month for the lease itself, and what that would be based on
  • The type of lease construction that is most beneficial to you (percentage lease, net lease, triple net lease, or gross lease)
  • The duration of your lease and what happens when it ends
  • The possible rent increases, what they are linked to, and what is the maximum
  • Who takes care of maintenance
  • To what extent you are able to change the inside of the building and who will shoulder the renovation expenses
  • Whether you can signpost your store on the outside of the building
  • Whether you can sublease the space and, if so, under what conditions
  • What types of exit clauses are in place should you want to leave before the lease ends
  • Your right to transfer your lease if you were to sell your business to a third party
  • Specific clauses, such as exclusive use or co-tenancy
  • Amount of security deposit

What the above shows is the complexity of leasing commercial real estate. It may, therefore, make you feel like buying your property is a much better option. After all, it means that you don’t have any of those problems to deal with. Furthermore, commercial real estate is known to be a solid, low risk, high yield investment, with property prices generally riding out any economic difficulties and growing rapidly in times of economic prosperity.

Purchasing Commercial Property in Coto de Caza

However, buying commercial real estate has its own significant downfalls as well. First of all, there is the inescapable fact that you will need to come up with that 30% down payment, which can be a huge amount of money. Secondly, you are restricted by zoning, which means that you can only run certain types of businesses in specific geographical areas. For instance, you may not have a gaming establishment or casino in the middle of a school zone. While you can apply for re-zoning, this is a costly affair and one that is rarely agreed to. In terms of renovating your property, you will have more liberties than with a lease, subject to local ordinances and building codes, but you will also have to foot the bill yourself. And then there is the issue that, while it is beneficial that you can lease out your property should your own business contract or even close, this would mean that you once again have to deal with all the points above, now from the perspective of a landlord.

There is a final alternative, which is particularly suitable for those who are only interested in commercial real estate for the investment value. This option is the commercial real estate investment trust. In this case, you pool your money together with other investors and simply watch your investment grow. However, this also means that you don’t have any control of the property or how it is used.