San Juan Capistrano Commercial Real Estate for Sale & Lease

San Juan Capistrano is found within Orange County, CA. According to the city’s OMB metropolitan designation, it is part of Santa Ana-Anaheim-Irvine. In the 2010 census, it had a population of 34,593, which represents a marginal rise from the 2000 census. The city got its name from Mission San Juan Capistrano, around which it was built. It is home to many residential properties as well as strip malls, and the architecture is of the Spanish type from those days. In terms of homes, it has the widest variety in all of the county. Some homes are even from the 18th century. The city is also home to a cliff swallows population, which migrates between Argentina and Mission San Juan Capistrano every year.

The city is reasonably affluent, as is most of Orange County. Unemployment is low, although many people work outside of the city. That said, the top employers within San Juan Capistrano are St. Margaret’s Episcopal School, Costco, 24 Hour Fitness, Emeritus at San Juan Capistrano, JSerra Catholic High School, Color Spot Nurseries, Fluidmaster, Marbella Country Club, Capistrano Connections Academy, and San Juan Hills Golf Club.

San Juan Capistrano Commercial Buildings for Sale & Lease

San Juan Capistrano does not have a wide variety of commercial real estate (CRE) properties, although it does have a number of strip malls. There are properties of interest to both business owners, who want to operate out of them, and investors, who want to become landlords. Both categories of people have two options available to them. Business people can decide to purchase a property in the commercial buildings for sale & lease, if that is financially viable, or they can decide to get a lease. Investors can decide to purchase a property outright and become a landlord, or they can decide to join a commercial real estate investment trust (REIT) and leave the management of the property to the REIT. Each of these options has a number of specific advantages and disadvantages and it is very important to be aware of them before deciding which option to choose for your particular needs.

Many people, when comparing the different options, compare only how much they are out of pocket each month. This, however, is not the correct way to do it. There are many other factors involved, including insurance, deposits, taxes, responsibilities, and more, that must be considered in order to determine which option to choose.

San Juan Capistrano Commercial Property for Sale

One place to start in comparing your options, whether you want to run a business or make an investment, is in the CRE trends. For San Juan Capistrano:

  • Multifamily properties in the county usually cost around $314,841.90, which is a 0.7% rise during 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 it equates to a 11.3% year on year increase.
  • Industrial properties in the county usually cost around $222.13 per square foot, which equates to a quarterly rise of 2.7% and a rise of 10.9% in one year. If you own an industrial property, you can usually charge rent of $12.70 per square foot per year in San Juan Capistrano, which is a rate that has been steady over the past three months and over the past year. That price is higher than in the metro, and state area, but lower than in the county.
  • 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% increase.

San Juan Capistrano Commercial Property for Lease

If you have decided that you want a commercial property for lease in San Juan Capistrano, your first step should be to get a team of professionals around you. These professionals should include a lawyer, an accountant, and a CRE broker. The latter is complex, as there are two options to choose from. Their are leasing agents, who are easy to find but who work to the benefit of the landlord. There are also tenant brokers, who work to the benefit of you. Unfortunately, they are harder to find and they will generally want you to sign a representation agreement. However, since the landlord is likely to be the one paying for the broker’s fees, it is advisable to find a tenant broker.

How a Broker, Lawyer and Accountant Can Help

The broker will then get to work suggesting properties for you, which is where the accountant starts to become important. The accountant can determine whether or not the property is affordable and whether it is fit for purpose. Once you have found a property, you will need to start to negotiate the contract. Don’t make the usual mistake of believing that leasing contracts are non-negotiable. They are, and landlords, hoping that you don’t know this, will skew the terms and conditions heavily in their favor. This is where lawyers can help, as they can determine the legality of the contract as a whole.

There are a number of points in particular that should be negotiated on, including:

  • The length and extent of your personal guarantee. As this means that you will be personally responsible for paying the monthly lease if your business goes under, it is reasonable to expect this to be a trust contract that is much shorter than your overall lease contract.
  • How much you have to pay each month for the lease, and what that would be based on. This should be based on usable space, whereas the first contract from your potential landlord is likely to be based on total space.
  • 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 comes to an end
  • The possible rent increases, what they would be based on, and how much is the cap.
  • Where the responsibility for maintenance will lie, which is generally with the landlord if you have a lengthy lease term. If so, it is also common to expect the monthly lease to be reduced while the property cannot be used while renovations are being made.
  • To what extent you are able to change the inside of the building and who will shoulder the 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 of security deposit that is required

As you can see from the above, there are many different things to consider when it comes to a lease contract. This explains why it is so important to have a team of experienced professionals on your side who know exactly what the rules are, and how things can work to your benefit.

How About Purchasing a Commercial Property for Sale?

Looking at all of that, you may feel as if leasing is far too complex, and that purchasing is therefore the better option. Certainly, if you want to invest in property, then leasing is out of the question anyway. However, purchasing has a number of strong disadvantages as well. The first is that you will not be able to find a mortgage for a loan to value above 70%, meaning that you have to tie up 30% of the value of your property in your mortgage. This is a serious chunk of disposable income that most people don’t have and, if they do have it, they would rather use it for something else, such as for growing their business.

That said, CRE is known to be a solid, strong investment. Commercial properties are always in demand, even if there is an economic downturn. So long as you are able to afford the mortgage payments if you do not have a lessee for a few months, you are almost guaranteed to eventually have a very profitable investment, obviously even more so if the property is leased.

However, there are some limitations. One of the major limitations is that CRE is subject to zoning. This means that it has been determined what type of industry a building can be used for. For example, an industrial estate may not always be used for a retail shop, and it is generally not allowed to put a factory inside a mall, for instance. It is possible to apply for re-zoning but this is complex and expensive.

Conclusion

As you can see, there is much to think about when it comes to commercial buildings for sale & lease in San Juan Capistrano. You need to consider all the pros and cons of leasing and purchasing, and about your personal capabilities and intentions. Make sure you get that professional team around you to help you make this decision and weigh up the different options.