Newport Beach is found on the coastline of Orange County, CA. In 2010, it had a population of some 85,287 people. It is famous for Newport Harbor, which is considered to be the biggest recreational boat harbor in the West Coast. Newport Beach is very affluent, with both property values and median family incomes ranking among the highest in the country. In fact, according to the Daily Pilot, a Costa Mesa newspaper that covers all of the Newport-Mesa area, at least 25% of households in Newport Beach earn $200,000 or more per year, and that property values have a median value of $1 million or more. This ranks the house prices in the city as 8th in the entire country, according to a survey in 2009. On a side note, Newport Beach is the most Republican city in the state.
Newport Beach Retail Building for Sale & Lease – Should You Buy or Lease?
If you are interested in getting a retail building, for your business or just for investment, you have two broad options: buy or lease retail space. Naturally, there are pros and cons to consider.
Purchasing a retail building has various benefits:
- Monthly costs are fixed because amortizations are generally constant.
- Several tax deductions can be made, including property taxes and mortgage interest.
- If retail building is large enough, you can rent out some of the space to produce extra income.
- You can generate some funds, as the property is likely to increase in value over time.
The disadvantages of buying include:
- Retail buildings, just like other real properties, are not liquid assets. Thus, it will take several months to sell them in case you need to move to another place or close down your business.
- The need to pay a down payment, which is usually at least 30 percent of the contract price. This is a large amount of money that could have been used elsewhere in the business.
- Maintenance, appraisal, and other property expenses increase the strain on funds.
On the other hand, if you lease retail space, you get several advantages:
- You can get a prime retail building. This can substantially boost the reputation of your business.
- You have more working capital as you start your business because there is no down payment to be paid.
- You don’t need to bother yourself about the common issues that come with property ownership.
With regards to the disadvantages of leasing, these include the fact that:
- Your costs will be variable, mostly because of possible rent increases, depending on the lease contract.
- You do not build up any equity in the property, since you don’t own it.
To help choose between the two options, you might want to be aware of the trends and statistics in terms of prices, supply, and demand with regards to retail buildings.
Newport Beach Retail Property for Sale – Trends and Statistics
- The asking price for retail properties in Newport Beach in dollars per square foot is $408.88, which has remained the same over the past three months, and represents a 14.5% increase year on year. This is higher than the metro ($282.45) and state ($214.98) area.
- The index of total available retail properties for sale in Los Angeles-Long Beach-Newport Beach is 45, which represents a 9.7% increase over the past three months and 7.1% increase year on year.
- The index of total number of listings of retail properties available in Los Angeles-Long Beach-Newport Beach is 35, which is a 2.6% decrease over the past three months, as well as a 10.6% decrease year on year.
- The profile view index retail for sale in the Los Angeles-Long Beach-Newport Beach metro area is 123, which is a 10.6% increase over the past three months, and a 14.7% increase year on year.
- The index of total square feet of available retail space for sale in the Los Angeles-Long Beach-Newport Beach metro area is 34, which is a 3.2% increase over the past three months, but an 8.5% decrease year on year.
Newport Beach Retail Property for Lease – Trends and Statistics
- The asking rent for retail properties for lease in Newport Beach in dollars per square foot per year is $24.21. This represents a 0.9% decrease over the past three months, but a 0.4% increase year on year. This is higher than the state ($20.88) area, but lower than the metro ($24.88) area.
- The index of total number of retail spaces for lease in the Los Angeles-Long Beach-Newport Beach area is 71, which represents a 2.4% increase over the past three months, and a 1.4% increase year on year.
- The profile view index of retail properties for lease in the Los Angeles-Long Beach-Newport Beach area is 91, which is a 49.3% decrease over the past three months, and a 47.5% decrease year on year.
- The index of total square feet of retail space available for lease in the Los Angeles-Long Beach-Newport Beach area is 69, which is a 5.3% increase over the past three months, and a 3.3% increase year on year.