San Clemente is part of Orange County, CA. At the 2010 census, it had a population of 63,522. Located on the coast of California, it is known for its hills, ocean, mountain views, Spanish Colonial architecture, and pleasant climate. The slogan of the city is “Spanish Village by the Sea”, its city flower is the bougainvillea, and its tree is the coral tree. San Clemente has a strong surfer community. It is an affluent, mainly residential city, but it also has some strong industries. In fact, a number of corporations have their headquarters in the city, including medical device manufacturers Cameron Health and ICU Medical, fast casual Asian food producer Pick Up Stix, premium sandals manufacturer Rainbow Sandals, automotive software manufacturer DealerSocket, and traffic safety devices manufacturer TrafFix Devices, Inc. The largest employers in San Clemente are the Capistrano Unified School District, ICU Medical, the City of San Clemente, Cross Section Ventures, Ethical Nutrients, Ralphs, Albertsons, Fishermans Restaurant, Wal-Mart, and Inspirational Films.
Interestingly, a new retail project has recently been started, and this is The Outlets at San Clemente, which is in a sprawling location. It offers great brand bargains and ocean view shopping. It is an outdoor mall with an open roof and is expected to provide a tremendous boost to the overall economy.
San Clemente Commercial Buildings for Sale & Lease
There are numerous reasons as to why someone may be interested in commercial real estate (CRE). First of all, there are property investors, who may purchase commercial buildings for sale & lease to become a landlord, seeing their property as a long term investment. Alternatively, they may invest in a commercial Real Estate Investment Trust (REIT), whereby they effectively own shares or parts of a CRE. In this case, they do not become landlords but have the property or properties managed by the trust itself.
People may also be interested in CRE because they want to run a business. It is more common for these people to lease a property rather than purchase it, mainly due to the large upfront cost of making a purchase. That said, those who do have a long term plan for their company are recommended to make a purchase. Some, meanwhile, try to combine the two: purchasing CRE both to run their own business and as a long term investment.
Coming to a decision about whether to lease or purchase, if both options are viable, is a complex one to make. There are significant advantages and disadvantages attached to both options, and it is very important to be aware of these. Large sums of money are inevitably required for commercial buildings for sale & lease, which means this is a decision not to be taken lightly.
San Clemente Commercial Property for Sale
To begin examining whether to choose a commercial property for sale or simply find one to lease, one can look at the trends. For San Clemente:
- 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
- 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 unchanged over the past quarter. Year on year, however, this is a 14.5% rise.
San Clemente Commercial Property for Lease
If you are in the category of people whereby leasing is the only possible solution, there are quite a few things that you have to take into consideration. The reality is that the majority of businesses do not have the upfront capital required to make a purchase and therefore turn to lease. Despite this being so common, however, actually finding a property can be quite complex. Brokers do exist, and their fees are usually paid for by the property owner. As a result, the owner is likely to send you towards a leasing agent, who represents their interests more than yours. The alternative is for you to find a tenant broker, who represents your interests more than those of the landlord, but they may want you to sign a representation agreement, meaning that you cannot enlist the services of another broker in your search for a CRE.
Look for a Broker, Lawyer and Accountant
Besides a broker, you should also enlist the services of a lawyer and an accountant. Put together, they can ensure that the deal you eventually get on a property that you are interested in is good, legal, and financially viable. There are numerous things that need to be properly covered in a lease, and most landlords presume that potential tenants do not know how to negotiate, or even that they can negotiate, and will instead accept highly unfavorable terms. By having a team of experts around you, you can avoid this and ensure the different points of your lease are properly discussed.
Some of the more pertinent issues that you can expect to have to negotiate on include:
- The length and extent of your personal guarantee
- How much you have to pay each month for the lease itself, and what that amount is based on. It should be based on usable space, and not on total space of the property. This can make a huge difference overall.
- The type of lease construction that is most advantageous to you (percentage lease, net lease, triple net lease, or gross lease)
- The duration of your lease and what happens once it comes to an end
- The possible rent increases, what they are based on, and how is the maximum amount that can be allowed
- Who will be responsible for maintenance, with this generally being tied to the type of lease you have signed up for
- To what extent you are able to change the inside of the building and who will handle the renovation expenses. For lengthier leases, the landlord usually pays for these and provides a discount on the monthly payment while the work is being done.
- Whether you can signpost your store on the outside of the building
- Whether you can sublease the space and, if so, under what conditions and circumstances
- What types of exit clauses are in place should you want to end the lease earlier because of certain circumstances, such as when you are shutting down your business
- Your right to transfer your lease if you were to sell your business to a third party, so that they can remain within the property
- Specific clauses, such as exclusive use or co-tenancy, which can be very important in terms of clientele
- The amount of security deposit, as well as where it will be held and how you can have it returned to you.
As you can see, there are many different things that you need to take into consideration and, without help, it is unlikely that you will know how to make sure that your deal is a good one. If you were to make a CRE purchase, however, none of this has to be of your concern. The only real limitations you have are zoning, building codes, and local ordinances, but everyone has to deal with those. That said, purchasing may simply not be an option for you.
Investing in Commercial Buildings for Sale & Lease
What is for sure is that CRE is a fantastic investment. There is always a need for retail, industry, and office space, regardless of what the state of the economy is. Even if the economy contracts and spaces become vacant, they usually still retain their value and, once the economy picks up again, they will grow their value substantially. By owning a piece of CRE as a business owner, you can make sure that you continue to have an income should your business go under, simply because you have a property available for them.
There are certain limitations on CREs, however, with the biggest one being zoning. Zoning means that the local government has determined that certain types of properties can only be used for certain types of business. For instance, it is not possible to put an oil manufacturer in the middle of a busy shopping street. The other downside to a CRE is the high deposit it requires. This is why it is also a good idea to join a commercial REIT, as none of that would be your concern. Rather, they will handle all the managerial and administrative issues relevant to the purchase.
Conclusion
Clearly, if you are considering a CRE lease or purchase, there are many different things that you have to consider. You need to make sure that you surround yourself with experts who understand your current personal circumstances and are able to find you the most viable option for your particular requirements. In so doing, you will ensure that you get the best possible deal out there for your needs. It cannot be stressed enough how much you need a broker, a lawyer, and an accountant to help you secure a good deal.