Dana Point Commercial Real Estate for Sale & Lease

Dana Point Commercial Real Estate
Dana Point is found in the south portion of Orange County, CA. According to the 2010 census, it had a population of 33,351, which makes it a relatively small city. Although small, it is home to one of the few harbors that are found along the coast of the county. It is easily accessible through State Route 1. It also has a strong surfing community.

The city got its name from the Dana Point headland, which in turn got its name from Richard Henry Dana, Jr. He wrote Two Years Before the Mast, and a description of the area is included in that book. In fact, he wrote about the locale, which included San Juan Capistrano, the neighboring city, and said it was “the only romantic spot on the coast”. According to Dana’s description, the anchorage there was poor but things have changed since he wrote his book. The harbor has been fully developed, and a replica of the Pilgrim, Dana’s ship, has also been included. The Pilgrim is used by the Ocean Institute as a classroom. It is also #189 in the California Historical Landmark list.

Dana Point Commercial Buildings for Sale & Lease

There are a number of options available to you if you were to want to take advantage of the growing economy of Dana Point. There are plenty of commercial real estate (CRE) opportunities out there, which can be either purchased or leased. Choosing between those two can be a complex decision, with many different factors to take into consideration. Both have advantages and disadvantages, and both have different costs associated with them. As a result, it isn’t as easy as simply looking at the difference between the monthly lease price and the monthly mortgage price, as you also have to think about taxes, maintenance costs, insurance, and, importantly, the future.

Very often, financial advisors will say that any business that intends to stay in the same building for more than seven years should consider purchasing the property. However, this doesn’t mean that it is the right option for you, or even that it is an option at all. This is why you need to carefully consider all the elements that are involved before you come to a final decision with regards to commercial buildings for sale & lease.

Dana Point Commercial Property for Sale

Whether you want to run a business or make an investment when looking at a commercial property for sale or lease, it is a good practice to look at CRE trends. For Dana Point:

  • Multifamily properties in the county usually cost around $314,841.90, which is a 0.7% rise during the last three months, and a year on year 10.5% increase.
  • 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. If you own office space, you can usually charge a yearly rent of $25.23 per square foot in Dana Point, and this has been unchanged over both the past quarter and the past year. Those prices are higher than in the county, and state areas, but lower than in the metro area.
  • 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 moved over the past quarter. Year on year, however, this represents a 14.5% rise. If you own retail property, you can usually charge $29.10 per year per square foot. This has been pretty much unchanged over both the past three months and the past year. This price is higher than in the state, county, and metro area.

Dana Point Commercial Property for Lease

Despite financial advice saying that you should buy if you intend to stay for more than seven years, this is not always an option. CRE is generally a very good investment, but also a very expensive one. This is particularly true because you have to put down a significant down payment, usually around 30%, if you were to be accepted for a mortgage. For most small businesses and startups in particular, this is more money than they have and, if they do have it, they would rather use it to grow their business.

Find a Broker

So, if you are one of the many that will have to go for a lease, you need to start thinking about how to go about that. Leasing a commercial property is very different from renting a residential property, something that few people understand. The first thing you have to do, therefore, is find a broker. You can choose between a tenant broker and a leasing agent. Leasing agents usually represent the landlord, whereas tenant brokers represent you. However, broker fees are generally covered by the landlord, which results in a tenant broker wanting you to sign a representation agreement, so you can’t go to a different broker. If you are interested in a lot of different properties, therefore, then the leasing agent may be the better option for you.

Hire a Lawyer and an Accountant

You should also make sure you hire an attorney and an accountant. With your understanding of your personal needs and requirements, the lawyer’s understanding of contract legalities, the accountant’s understanding of your financial situation, and the broker’s understanding of the properties that are out there, you should be ready to negotiate your leasing contract. These contracts are negotiable on pretty much every point, which is also something that sets them apart from residential tenancy agreements. Some of the most important points that you should try to negotiate in your favor as much as possible include:

  • The length and extent of your personal guarantee
  • How much you have to pay each month for the lease 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 ends
  • The possible rent increases, what they are based on, and how much would be considered as too much
  • Who would be responsible for maintenance
  • To what extent you are able to change the inside of the building and who will take care of 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 level amount of security deposit that is needed

As you can see, there are a lot of different things to take into consideration when it comes to creating a leasing contract that is favorable to you. It is a highly complex legal document that you should not sign without first taking a lot of things into consideration. Should you, instead, be able to purchase your CRE, those issues need not necessarily concern you. The exception is if you were to lease your property out, in which case you have to approach the above list from the opposite point of view.

Investing in Commercial Buildings for Sale & Lease

Many see CRE as an excellent investment, and these include financial experts. There are several reasons for this. There is the opportunity to use it in one of three ways. First of all, you can lease it out in full and live off your monthly rental earnings while watching the value of your property grow. The second way is to run a business out of your property, working to pay off your mortgage. The third option is to combine the two, by using some of the space and leasing out the rest. Whichever option you choose, you will have made an excellent investment. In fact, CRE is known as high yield low risk, mainly because there is always a need for commercial properties, even during an economic downturn.

So is there anything wrong at all with buying CRE? In fact, there is. The first is that you will have some restrictions according to the zoning regulations. This means that you can only run certain types of businesses from those locations. The second, and often biggest, issue, is putting down a 30% down payment on the asking price. That is money that very few people have. As a result, what you may want to consider is to sign up with a commercial real estate investment trust. With this, you get to enjoy the benefits of investing, without any hassle to contend with. The downside, however, is that you don’t have any input on how the property is used or managed. Decisions are made for you, in other words.

Whichever option you end up going for, so long as you carefully considered the pros and cons, you should be able to make the right decision.