Ladera Ranch Commercial Real Estate for Sale & Lease

Ladera Ranch is a Census-Designated Place (CDP) in Orange County, California. It is a highly affluent, planned community, found in the south of the county. It is just outside of Mission Viejo, Rancho Santa Margarita, and San Juan Capistrano. The CDP is divided into nine individual villages. Each of these villages has contracts with different builders, who develop the neighborhoods within them. Each village has at least ten neighborhoods. The nine villages are the gated Covenant Hills community, Terramor Village, Avendale Village, Echo Ridge Village, Wycliffe Village, Township, Flintridge Village, Bridgepark, and Oak Knoll Village.

Out of the nine villages, five have a themed clubhouse that is based on an architectural style, followed throughout the entire village. Additionally, each village has open areas, playgrounds, pools, and parks. Only Covenant Hills is a gated community, so that the general public cannot access it. However, any Ladera Ranch card-carrying resident can enter the community.

Besides the club houses, Ladera Ranch is also home to a skate park and private water park, a dog park, 18 community parks, various pocket parks, six small neighborhood pools, miles of biking and hiking trails connecting to Doheny Beach, and two shopping districts. The shopping districts are Mercantile West Shopping Center and the Mercantile East Shopping Center.

Ladera Ranch Commercial Buildings for Sale & Lease

The economy of Ladera Ranch is very strong and therefore also very interesting for those who want to invest in property, or start a business there. Property investors would only be interested in purchasing commercial real estate, but those who want to run their own business also have the opportunity to lease a property instead. Deciding on Ladera Ranch commercial buildings for sale & lease, however, is a very complex issue with a lot of pros and cons to be aware of.

Usually, when we try to determine what is the most financially viable, we look at the price of the two options per month and go for the cheapest one. Unfortunately, when comparing leases to mortgages, it isn’t as easy as that. This is because both constructions have different associated costs (including insurance, maintenance, and renovation), different initial investment costs (a down payment of 30% versus a security deposit of a few months), and different returns (none for a lease, but the potential for a lot on a purchase, depending on market conditions).

Deciding between these two options, therefore, is a complex one. It is important that you work together with professionals, including a lawyer and an accountant, to help you come to the right decision. As a team, you should sit down and look at all the different pros and cons, and continue from there.

Ladera Ranch Commercial Property for Sale

One place to start with comparing your options, whether you want to run a business or make an investment, is in trends regarding Ladera Ranch commercial property for sale:

  • Multifamily properties in Orange County usually cost around $314,841.90, which is a 0.7% rise during the last three months, and a one year increase of 10.5%.
  • 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% year on year rise. If you own office space, you can usually charge a yearly rent of $29.36 per square foot in Irvine, which is a 1.9% increase over the past three months, and a 7.1% increase over the past year. Those prices are higher than in the county, metro, and state areas.
  • Industrial properties in the county usually cost around $222.13 per square foot, which equates to a quarterly rise of 2.7% and a year on year rise of 10.9%. If you own industrial property, you can usually charge rent of $15.17 per square foot per year in Irvine, which is a 2.5% increase over the past three months and an 7.5% increase over the past year. That price is higher than for the county, metro, and state areas.
  • Retail properties usually cost around $408.88 per square foot, which has been stagnant over the past quarter. Year on year, however, this is a 14.5% rise. If you own retail property, you can usually charge $24.16 per year per square foot. This is a 0.7% decrease over the past three months, but a 4.7% increase over the past year. It is also slightly less than the county and metro area, but slightly more than the state average.

Ladera Ranch Commercial Property for Lease

If you have determined that a Ladera Ranch commercial property for lease is the best solution for you, you will need to start the hard work in earnest. The first step of this is to actually find a property. Finding a property means working with a broker. Luckily, broker fees are almost always paid for by the landlord. However, there are two types of brokers, and you have to choose the right one. Your choices are:

  1. Tenant brokers, who will work mainly on your behalf. In return for that, however, you will have to sign a representation agreement, which in turn means that you can only see the properties that they actually manage, thereby actually limiting you to some degree.
  2. Leasing agents, who will work mainly on behalf of the landlord. However, you can work with as many as you want, which means that you can see all the available properties as well.

After you have chosen your broker, visited various properties, and selected the one that you want, it is time to start negotiating. Leasing contracts can be fully negotiated, which is one of the things that set them apart from residential tenancy agreements. This is another reason why it is so important that you have a team of professionals on your side, including your lawyer and your accountant, as they can make sure that your interests are represented as well as possible. Just some of the things that you can negotiate on include:

  • The length and extent of your personal guarantee
  • How much you have to pay each month for the lease itself, and what that is 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 how much they are capped
  • Who is responsible for maintenance
  • To what extent you are able to change the inside of the building and who will carry those renovation costs
  • 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 early
  • 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
  • The amount for security deposit

What this shows is just how complex a leasing agreement is. You may, therefore, consider purchasing your property instead. However, buying a commercial real estate property is not without its complexities either. The biggest hurdle to overcome is the fact that you will be required to put down a 30% deposit if you are to be considered for a mortgage. This is a significant amount of money that most businesses don’t have, or, if they do have it, they need to actually build and grow their business.

How About Purchasing a Commercial Property?

If you do have the money available, however, then purchasing can be a very good option. It means that you have the freedom to do with it as you please, subject to some restrictions. These include the fact that you may not be able to change some of the outside, particularly if your building is listed. You also have to follow all the necessary local ordinances and building codes, but that is the same with a lease. The last restriction is that of zoning. Zoning means that only certain types of businesses can operate in certain areas. For instance, you will not be allowed to open a chemical lab inside a residential shopping mall. You can apply for re-zoning, but this is an expensive endeavor and rarely successful.

One of the things to know about commercial real estate is that it is an excellent investment with high returns. If, for instance, you want to run your business out of this property, and your business contracts or even closes, you can still use the property by leasing or subleasing it. Naturally, that means you have to deal with the complexities of leasing again, only from the other perspective. The problem for many, however, is the 30% down  payment. One way to overcome this is by investing in a commercial real estate investment trust instead. This allows you to enjoy all the benefits of rising property values, but you can’t actually use the building for yourself.