Midway City is part of Orange County, CA, and while it is a census-designated place, it is actually controlled by the county. It is also the only place in the entire county where the homeowners association and the chamber of commerce act together like a city council. Around Midway City, you will find Huntington Beach and Westminster. The name of the city stems from the horizontal midway that is found between it, Seal Beach, and Santa Ana. According to the latest census, the population was 8,485 in 2010.
While a small community, it is also one of the oldest in the county. The majority of properties here were constructed during the 1950s. There are also two mobile parks, with residents of moderate income. They are also mainly senior citizens. The area is very popular because lot sizes usually exceed 8,000 square feet, with some being much bigger. Many people have purchased multiple lots and either built large homes on them, or extended the existing properties.
Because the county area has not been incorporated, Midway City seems to constantly battle municipal annexation from cities that border it. There have been multiple attempts to completely annex the town, but this has been fiercely resisted by residents. They have made it clear that they prefer to remain unincorporated as they are now, thereby also ensuring their property taxes and water rates remain lower than those of other communities.
Over time, however, Westminster has started to annex land to the border of Midway City. Here, they have placed mainly public schools, which enables government school fund decision making. Furthermore, they hope that the California State Route 39/Beach Boulevard can be redeveloped into business districts. As a result, Midway City is made up of four individual sections, each of which contains residential homes, nonprofit businesses like the Brothers of Saint Patrick Order and American Legion Post 555, and small businesses.
What you find in Midway City is a mix of rural businesses, Vietnamese businesses, and retirement communities. It is home to Little Saigon, where businesses such as Dakao Poultry thrive. Here, animals live on the grounds and are chosen by the customer, then prepared while they wait. Just down the road is Baladi Poultry, which works in a similar way. There is also a popular pet seller, Midway City Feed Store, and two animal food sellers. There is a strong focus on pets, it seems, with the Animal Assistance League of Orange County also being located here.
Midway City Commercial Buildings for Sale & Lease
The economy of Midway City is very interesting, and one that many businesses would like to build on. This can be done in a number of different ways. First of all, property investors can purchase commercial real estate (CRE) and lease it out to business owners. Secondly, business owners can decide to purchase CRE as an investment in their own business, or they can lease it of a property investor. For business owners, choosing between Midway City commercial buildings for sale & lease is a complex decision, where many factors have to be taken into consideration. Unfortunately, it is not as simple as putting the monthly cost of the mortgage and the monthly cost of the lease side by side and choosing the cheaper one. Both have their own specific advantages and disadvantages, impacting what the true costs and returns of the property are. For instance, there is a huge financial difference between the mortgage down payment and the lease security deposit. There are also difference in associated costs, taxes, insurance, and more. Coming to a decision means properly exploring all the different options first.
Midway City Commercial Property for Sale
One place to start with comparing your options, whether you want to run a business or make an investment, is with trends in Midway City commercial property for sale:
- Multifamily properties in Orange County usually cost around $314,841.90, which is a 0.7% rise within 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.
- 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%.
- Retail properties usually cost around $408.88 per square foot, which has not changed over the past quarter. Year on year, however, this indicates a 14.5% rise.
Midway City Commercial Property for Lease
In the case of business owners, the only viable option is generally to lease their property. This is because the down payment required on a mortgage is generally around 30%, which is more capital than most businesses have. This is particularly true in Midway City, where most businesses are small enterprises, or even independent traders. Even if they were to have 30% of the mortgage, they would need that money to grow their business rather than tying it up.
However, if you have come to the decision to get a Midway City commercial property for lease, there is still a lot of legwork to do from there. It is vital that you surround yourself with a team of professionals and experts to make sure you end up with the best possible deal. As a minimum, this team should include:
- An accountant, who will be responsible for the financial side of the transaction
- A lawyer, who will be responsible for the legal side of the transaction
- A broker, who will be responsible for the practical side of the transaction
On the subject of brokers, you will find that this is another element that isn’t as straightforward as it may seem. Broker fees are generally paid for by the landlord, but you do have to decide what type of broker you work with, with two different types existing and both having pros and cons. The two types are:
- Tenant brokers, whose main responsibility it is to get you the best deal. However, in return for that, they expect you to sign a representation agreement, which means you will only be able to see properties that they hold on their books.
- Leasing agents, whose main responsibility it is to get the landlord the best deal. While this is a significant disadvantage, the benefit is that you can work with multiple leasing agents at the same time, meaning you are able to view far more properties.
Once you have chosen your broker, viewed properties, and found one that you believe is suitable for your needs, the real hard work commences. Unlike residential tenancies, virtually every element of a leasing contract can be negotiated on. This is why it is so important to have an experienced accountant and lawyer on your side as well. Together, they will be able to ensure you get the best deal on the following issues:
- 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 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 comes to an end
- The possible rent increases, what they are linked to, and how the cap
- Whose responsibility is maintenance.
- To what extent you are able to change the inside of the building and who will pay for the 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 security deposit
What this demonstrates is just how complex a lease agreement actually is. This may make you feel like a purchase is therefore the better option. After all, the property is then yours to do with as you please and, subject to local ordinances and building codes, you don’t have any restrictions. However, you are also subject to zoning, which means that you can only operate certain types of businesses out of them; if you decide to lease the property, you will be a landlord who has to negotiate on all of the above but from the other perspective; and you have to find that 30% down payment.
There is one solution, which is to invest in a commercial real estate investment trust, or REIT. This means that you don’t actually own any property, nor do you have landlord responsibilities, but you pool your money together with others to watch your investment grow. The downside of this is, however, that you can also never use the property to run your own business.