Costa Mesa Hotel & Motel Property for Sale

Costa Mesa is what is known as an edge city, meaning that it is mainly suburban, with businesses and retail locations intermingled in what used to be mainly residential sectors. With an economy primarily based in light manufacturing, commerce, and shopping/retail, Costa Mesa is a location where new hotels and motels could prosper without much direct competition.

With a population of more than 112,000, as of 2013, combined with its proximity to Anaheim, Santa Ana, and Long Beach, hotel owners can also count on tourists and nearby commuters to stay. Costa Mesa isn’t known as a tourist attraction on its own, but being only 34 miles to Los Angeles, it is a prime middle ground for those visiting the big city, but not wanting to pay big city accommodation costs.

Costa Mesa Hotel & Motel Property for Sale & Lease

Whether you should buy or lease is a decision based on your own business needs and assets. Entering a financial agreement of this nature is a big decision, and can have drastic results if you’re not ready for it. Many individuals don’t realize the amount of work that goes into running a hotel or motel, and feel unprepared once the contract is finalized. If you’ve never managed within the hospitality industry before, brushing up on hotel knowledge will be a big asset, not only in running an establishment, but in getting the best price on your investment as well.

Costa Mesa is home to many commercial realtors and financial advisors, and taking on this kind of commitment will require the assistance of both. Even if you’re planning to lease, having the help of a trusted professional can keep you out of leasing pitfalls, and help you onto the path for success.

Costa Mesa Hotel & Motel Property for Sale

The cost of hotels in Southern California fluctuates each year, but can cost anywhere from $800,000 to $9-million dollars. Negotiation skills and market knowledge are the best tools a hotel buyer can arm themselves with in today’s market. Going into a negotiation with a clear-cut view on what Costa Mesa hotels are worth, how well the market is doing, and what kind of growth you will see in the future, gives you the upper hand. As with any big financial decision, taking the first offer is rarely advisable. Companies usually go in swinging to reap the best financial opportunity for their property. To benefit from the deal, and not overspend, be prepared to hit back just as hard.

Costa Mesa is primed for tourists and business travelers, as a hub between many cities within Orange County. A short drive to downtown Los Angeles, Costa Mesa also sees travelers who want to access the big city, without spending big city prices. Hotel owners within this city profit from the current hospitality climate, and can market themselves as such.

Large commercial properties are evaluated based on several factors including square footage, location, and age. Newer buildings in sought after districts are evaluated higher than those which require more updates and renovations. This might cause you to lean toward a newer hotel, but finding a fixer upper with minor repair needs can be a great investment if you have the time and financial backing to bring it up to code quickly.

Costa Mesa Hotel & Motel Property for Lease

Leasing a hotel property can be just as risky as buying, although it offers the assurance of not being totally financially responsible for the building and property. Leasing, like buying, is priced based on square footage. This means that the larger the building you lease, the more you’ll pay per year. Depending on your contract, the lease could run 5 or more years, with options to renew later. Of course, if the owner decides not to lease again, you could find yourself looking for another location, which can prove to be detrimental to your business. Costa Mesa does have leasing options for hotel and motel properties, but not as many as larger cities like Los Angeles.

If you are taking on a lease of this magnitude, discuss the option of a fixed fee. Using this indexed growth variable, you know you’ll get a return without as much risk. Another contract style includes revenue sharing, which allows the owner to take on some of the earnings, while also retaining much of the risk associated with operating the business. In this scenario, there’s a higher risk for both parties, but as the one signing the lease, you can be assured of the owner helping throughout the entire hotel management experience. Watch for early termination clauses, which could include the ability to withdraw from the contract based on poor performance of your establishment. You want to give your business a real chance at thriving, so don’t give the property owner too much of the reins in terms of deciding when enough is enough.