Villa Park Commercial Real Estate for Sale & Lease

Villa Park is a small city in Orange County, CA, which was first incorporated in 1962. The 2010 census said that some 5,812 people lived in Villa Park at that time. This makes it the least populated place in the county. It is very much a single family city, with the average home lot being around 20,000 square feet. There is a small shopping center within the city limits as well. The city hall is found inside of a community room, where the Orange County Public Libraries system is also found. Both are right next to the only shopping center in the city.

Villa Park Commercial Buildings for Sale & Lease

Villa Park is unique for people who are considering commercial real estate (CRE). Generally speaking, there is the option of buying or leasing CRE. Buying is suitable for property investors, and for businesses who want to operate out of a premise. Leasing, by contrast, is only suitable for those who want to run their business. The issue in Villa Park is that there are only a few CRE properties available, with only a single shopping center. The majority of people work outside of the city limits, and the shopping center itself is owned by Tony Xia, a well known property developer. He is not looking at selling what commercial real estate is available, although units may be available for lease. Nevertheless, he also seems to have plans to further develop Villa Park, which means the situation may change in the near future.

Besides the fact that it is impossible to purchase CRE in Villa Park because none is available, purchases are also often out of people’s reach because of the sheer cost that is involved with them. But assuming that developments in the future allow for th possibility of a purchase, when trying to work out whether a lease or a mortgage is more expensive, there are more things to think about than the monthly price on its own. There are a multitude of associated costs to consider, as well as tax advantages and disadvantages, insurances, and so on. Both constructions also need some sort of down payment, which is also important to consider. Hence, you have to think about all the possible pros and cons associated with either buying or leasing before you come to a final decision.

Villa Park 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 regards to trends in commercial property for sale for Orange County, as there are no available commercial properties in Villa Park at the moment:

  • Multifamily properties in the county usually cost around $314,841.90, which is a 0.7% rise within the last three months, and a year on year 10.5% rise
  • 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 been stagnant over the past quarter. Year on year, however, this is a 14.5% rise

Villa Park Commercial Property for Lease

In Villa Park at present, the only real option is to lease, rather than purchase, CRE. Even if more was available, however, CRE is likely to be impossible for new businesses in particular to purchase. This is because existing properties tend to be very large, and therefore also very expensive. A mortgage carries with it a 30% down payment, which is money that businesses generally don’t have or, if they do, they will need it to grow their business. The other option would be to build new CRE, but this costs both time and money, two things that most businesses are in short supply of.

Get a Lawyer and an Accountant

If you do decide that you want to lease, therefore, you need to start considering your options. To start with, you should enlist the services of an accountant and a lawyer. Put together, they will make sure all your finances are in order, that you are acting within the applicable regulations and legislation, and that your lease contact, when you do sign, is completely legal. What you should also look for is a broker to help you find a property.

Get a Broker

In most cases, broker fees are paid for by the property owner. You have a choice of two different types of brokers. Firstly, there is the leasing agent, who works mainly to protect the interests of the landlord. While this may sound like a disadvantage, choosing a leasing agent does also mean you can usually see more properties, as you can work with multiple agents. The other option involves the tenant brokers, who work on your behalf but are likely to want you to sign a representation agreement, so that you can only view properties that they actually have on their books. Because there is realistically only one type of CRE available in Villa Park, the tenant broker may be the better option, since there isn’t much other property available. That said, a leasing agent may be able to show you other CRE in areas surrounding Villa Park. You clearly need to think about this before you decide which one to go for.

What is very important is that you find a broker who is happy to work with you, your accountant, and your lawyer to negotiate the best possible deal. Leasing contracts, unlike tenancy agreements, are highly negotiable, which means you can make sure each element within the contract is in your favor. This takes a significant amount of time, however, something else to keep in mind while you’re preparing to sign. Some of the points that can be negotiated are:

  • 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 comes to an end
  • The possible rent increases, what they are linked to, and how much is the cap
  • Where the responsibility for maintenance will lie
  • 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 of your security deposit

Purchasing or Investing in a Commercial Property

What you can see from this is just how complex a leasing agreement actually is, and how important it is to have a team of professionals on your side. None of these issues are of concern if you were to purchase CRE, as the property will then be yours to do with as you please, within the limitations of building codes, local ordinances, and zoning. Zoning means that you can only run certain types of businesses in specific geographical locations.

A lot of people are interested in CRE properties because they make such great investments. Commercial properties are always needed, even in times of financial difficulties. As such, even if property prices drop, meaning you can’t really sell, you can still lease out the property and make sure that you continue to meet your own financial responsibilities or even earn an income. However, purchasing CRE is also a serious investment, and one that is not within everybody’s means. The 30% down payment is one that most people struggle to raise.

An interesting alternative, however, is to join a commercial real estate investment trust (REIT). This means that you are effectively part of a community of investors who pool their money together to purchase properties. While this means that you cannot outright own a property, lease it out, use it for yourself, or be a landlord, it does mean that properties become a lot more a accessible. Through a REIT, property management companies are generally hired to deal with the administrative things such as leasing the building to others, which means you can literally see your money grow as properties are bought and sold.

The reality is that Villa Park is a complex location for those interested in property investment. However, it is likely that further developments will occur quite soon. This means that there may be interesting opportunities coming up for those who want to invest in commercial real estate. The recommendation for those who are not looking to purchase to run their own business is to join a commercial REIT as soon as possible and keep their eyes on developments. In so doing, they could suggest properties if and when they become available in Villa Park or in other parts of Orange County.