Irvine is one of the richest cities in Orange County, California. As a planned city, it was first developed in the 1960s by the Irvine Company. It was incorporated in 1971 and, according to the 2010 U.S. Census, it had a population of 258,386 at that time. In 2016, Irvine was officially named as the city in the country with the biggest Asian American plurality. In fact, some 45% of the population are Asian Americans. Irvine is home to a lot of industries and these include semiconductor and technology companies.
Irvine Retail Building for Sale & Lease – Should You Buy or Lease?
If you are interested in retail space, for the purpose of using it as an investment or to run a business out of, you have two broad options available to you: buying or leasing. There are pros and cons to both of these options.
Looking first at purchasing retail space, the pros include:
- That your costs are constant or predictable, at least with regards to the mortgage payments
- That you can get take advantage of tax deductions, including property taxes and mortgage interest.
- That you can allow some of your space to be rented, which would provide some extra income.
- That you can build up some savings, because the property value is likely to rise over time.
However, the cons are substantial as well and include:
- Not having much flexibility, which means that if your business contracts or grows, you may have to sell the property sooner than you had planned.
- Having high upfront costs. You will be required to pay a down payment of at least a 30% of the purchase price. You will also have maintenance, appraisal, and other property costs to take care of.
Your other option is to lease your retail space, which also has clear benefits, including:
- The possibility of getting a prime property, which is important if your public image matters.
- The fact that you have more working capital because there is no down payment.
- The fact that you can focus on actually running your business, rather than having to suffer the stresses of property ownership.
However, there are some downsides as well, including:
- Your costs will change over time, resulting from the rent increases.
- You are not able to build up any equity in the property, since you don’t own it.
To help choose between the two options, being aware of the trends and statistics in terms of prices, supply, and demand, is advisable.
Irvine Retail Property for Sale – Trends and Statistics
- The asking price for retail properties in Irvine in in dollars per square foot is $408.88, which has remained the same over the past three months, and represents a 14.5% increase year on year. This is higher than the metro ($282.45) and state ($214.98) area.
- The index of total available retail properties for sale in Los Angeles-Long Beach-Irvine is 45, which represents a 9.7% increase over the past three months and 7.1% increase year on year.
- The index of total number of listings of retail properties available in Los Angeles-Long Beach-Irvine is 35, which is a 2.6% decrease over the past three months, as well as a 10.6% decrease year on year.
- The profile view index retail for sale in the Los Angeles-Long Beach-Irvine metro area is 123, which is a 10.6% increase over the past three months, and a 14.7% increase year on year.
- The index of total square feet of available retail space for sale in the Los Angeles-Long Beach-Irvine metro area is 34, which is a 3.2% increase over the past three months, but an 8.5% decrease year on year.
Irvine Retail Property for Lease – Trends and Statistics
- The asking rent for retail properties for lease in Irvine in dollars per square foot per year is $24.21. This represents a 0.9% decrease over the past three months, and a 0.4% decrease year on year. This is higher than the state ($20.88) as a whole, but lower than the metro ($24.88) area.
- The index of total number of retail spaces for lease in the Los Angeles-Long Beach Irvine area is 71, which represents a 2.4% increase over the past three months, and a 1.4% increase year on year.
- The profile view index for retail properties for lease in the Los Angeles-Long Beach-Irvine area is 91, which is a 49.3% decrease over the past three months, and a 47.5% decrease year on year.
- The index of total square feet of retail space available for lease in the Los Angeles-Long Beach-Irvine area is 69, which is a 5.3% increase over the past three months, and a 3.3% increase year on year.