Huntington Beach Commercial Real Estate for Sale & Lease

Huntington Beach is part of Orange County, CA, and some 200,809 people currently live there. It has a 9.5 mile sandy beach stretch and is known for its beach and surfing culture. It is also known as “Surf City” due to its perfect surfing conditions. It is also home to a number of natural oil resources, although these are now nearly depleted. Once these resources are totally depleted, it is expected that tourism will become the city’s main economic driver.

Huntington Beach is also known to be a shoppers’ paradise, including the German-themed Old World Village, and Bella Terra. The city relies so much on its shoppers that they are even considering marking certain parts off limits to cars to increase shoppers’ satisfaction. To further enhance tourism, a range of hotels have been built as well.

The economy, to date, continues to be industrial, however. It is home to a refinery, the Boeing, and Cambro Manufacturing. Consideration is also been given to registering a Surf City trademark, which, if accepted, will be used on all products that are designed and manufactured in Huntington Beach. The trademark is currently held by the Huntington Beach Conference and Visitors Bureau.

Huntington Beach Commercial Buildings for Sale & Lease

Huntington Beach has a strong, growing economy. While they have established industries, the tourism industry is growing particularly quickly and many people are building on this, particularly with the knowledge that the oil reserve will soon be depleted. Huntington Beach is a very interesting location for those in the retail and food industries, and many of these businesses look for commercial real estate (CRE), either to purchase or to lease. Because of the growing economy, investors also frequently look at finding CRE to purchase and become landlords of.

If you are considering commercial buildings for sale & lease, you will have a lot of different things to think about. For many, the comparison seems to be quite simple: compare what you will pay per month on rent to what you will pay per month on mortgage. In reality, however, there is a lot more to it than that. A number of financial considerations have to be made first, including:

  • How much you have to put down as a down payment should you decide to purchase. This is often as much as 30% of the price of the property itself. As a result, many small businesses in particular are unable to purchase a commercial property for sale.
  • The tax advantages you receive by either leasing or owning, with both allowing for different types of deductions
  • The associated costs that come with owning or leasing a property, such as maintenance, renovation, and more

Huntington Beach Commercial Property for Sale

Whether you want to buy or lease CRE in Huntington Beach, it is important that you know how much value for money you will be getting. As such, the following statistics may be of benefit to you, helping you to calculate whether or not purchasing a commerical property for sale is within your reach.

  • Multifamily properties in the county usually cost around $314,841.90, which is a 0.7% rise compared to 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. If you own office space, you can usually charge a yearly rent of $24.30 per square foot in Huntington Beach, which is a 2.4% increase over the past three months, but a 0.2% decrease over the past year. Those prices are only slightly lower than in the county, far below the metro area, but higher than the state average.
  • 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. If you own retail property in Huntington Beach, you can usually charge $25.50 per year per square foot. This is a 2.2% decrease over the past three months, but a 1.7% increase over the past year. These prices are higher than the county, metro, and state averages.

Huntington Beach Commercial Property for Lease

If, from the above, you have determined that a purchase is not within your reach, then you will need to turn to a commercial property for lease. What you will find very quickly is that the system works very differently from renting a residential property. In fact, you may even struggle to find property listings at all. This is why you should first enlist the services of a tenant broker, who will be able to find something that best suits your needs. Usually, the broker fees are paid for by the landlord, which means they may want to encourage you to use a leasing agent instead, but such agents will work for the benefit of the landlord, not you. That being said, a tenant broker is preferable but will generally ask you to sign a representation agreement, which means you can only work with that person.

You should also get a number of other people on board to help you get the best deal out of your property. Some of these professionals are:

  • An accountant, who will be able to help you find out what you can and cannot afford. They can also advise you on the tax advantages and disadvantages associated with each option that is out there.
  • A lawyer with experience in business and real estate law, who can help you negotiate the best contract for your needs and determine whether it is legal or not. Most landlords hope that lessees do not negotiate on the contract, which would be quite a big mistake to make.

There are many elements of the contract that you can actually negotiate on, to ensure that it becomes more favorable to you. These include:

  • Details about your personal guarantee
  • Your monthly payments
  • The type of lease you sign up to
  • How long your lease will be
  • Possible extension arrangements
  • Rent increases
  • Who is responsible for maintenance and repair
  • Your right to redecorate and renovate
  • Signposting agreements
  • Subleasing arrangements
  • Exit clauses
  • Lease transfers
  • Exclusive use clauses and co-tenancy clauses
  • The security deposit

These are all very important factors that can make the difference between an unaffordable lease that you are tied to for decades, and a lease that enables your business to thrive and grow. By working together with the right professionals, you should be able to have a lease that is fair and that enables you to truly build up a business. But if not, you may want to consider purchasing after all.

What to Consider When Purchasing

If you do purchase your CRE, so long as that is affordable to you, none of the above concerns exist for you. In fact, the only two possible limitations on what you can do with your property are zoning restrictions and code regulations. Zoning means that certain properties in certain areas can only be used for certain operations. For instance, it is not possible to put an oil refinery in a small shop in a busy mall. It is possible to request re-zoning, although this is costly and not always successful. Zoning is something you have to contend with whether you lease or buy, which is the same as code restrictions. If, for instance, your property is a historic listed building, you will be limited in terms of how much you can renovate and chance, particularly on the outside.

A key benefit to purchasing your own CRE is that it is such a good investment. While the commercial property sector is influenced by dips and highs in the economy, there is almost always at least some demand for properties for use in running a business. Hence, if you were to own a CRE for your own business, but the economy means that you are not sustainable, you could continue to earn an income by leasing your property. Similarly, if you were to downsize, you could lease a part of the property. Owning CRE means that you have a potential income stream available to you.

Unfortunately, with the average prices of commercial properties in Huntington Beach exceeding $500,000, very few small businesses or startup businesses are actually able to make a purchase. There are currently no commercial mortgage providers that extend 100% mortgages. This also means that single investors are struggling to diversify their portfolio with CRE. Fortunately, one option that does exist is to join a real estate investment trust (REIT), which may invest in commercial properties. Not only does this mean everyday people are able to invest in a commercial property, it has the added benefit of placing the landlord responsibilities on the shoulders of a management company, rather than on you as an individual. And since the market in Huntington Beach is so strong, it is a low risk investment with the potential of high yields.