Seal Beach Commercial Real Estate for Sale & Lease

Seal Beach Commercial Real Estate
Seal Beach is found in California’s Orange County and according to the 2010 census, some 24,168 people were living there at that time, which is an 11 person rise since the 2000 census. The city is located in the most western corner of the county. Just across the Los Angeles County border, you will find San Pedro Bay and Long Beach. To the southeast are Huntington Beach’s Huntington Harbour, as well as Sunset Beach. Westminster and West Garden Grove are to the east of Seal Beach. Los Alamitos and Rossmoor, both unincorporated communities, are to the north. Most of Seal Beach has been taken over by the Naval Weapons Station Seal Beach U.S. military base.

The Boeing Company is one of the city’s major employers. Some 1,000 people currently work there. This was originally established to build NASA’s Apollo Saturn V rocket, which was the manned Moon mission space flight, as well as the Skylab program. Seal Beach is also home to Boeing Homeland Security & Services, which develops airport security products, as well as Boeing Space & Intelligence Systems, where classified programs and satellite systems are developed.

Besides The Boeing Company, major employers of Seal Beach residents include MagTek, Siemens Medical Solutions, Target, First Time Real Estate, Farmers & Merchants Bank of Long Beach, Bixby Ranch Company, Kohl’s, Spaghettini Grill and Lounge, Albertsons, Custom Building Products, Autism Partnership, P2F Holdings, Health Net, the Original Parts Group, and BakerCorp.

Seal Beach Commercial Buildings for Sale & Lease – Which One Should You Choose?

Seal Beach offers an interesting and diverse economy, not in the least because of The Boeing Company’s ongoing research. Furthermore, due to the NASA Apollo project, it is a popular location for tourists. As such, it has quite a flourishing economy in a variety of niches. Unsurprisingly, many property investors look to purchasing commercial real estate in Seal Beach to lease out to small businesses. Small businesses, meanwhile, have the option of choosing between Seal Beach commercial buildings for sale & lease.

Both leasing and purchasing have distinct advantages and disadvantages and deciding between these two options involves a complex process. It isn’t as easy as looking at the monthly mortgage amount compared to the monthly lease amount, unfortunately. This is because there are startup costs to contend with for both options (a down payment for a mortgage and a security deposit for a lease). Furthermore, both have varying associated costs, insurances to pay for, tax advantages and disadvantages, and possible returns.

Trends in Seal Beach Commercial Property for Sale

One place to start comparing your options, whether you want to run a business or make an investment, is in trends for Seal Beach commercial property for sale. Key information include:

  • Multifamily properties in Orange 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 stagnant over the past quarter. Year on year, however, this is a 14.5% rise. If you own retail property in Seal Beach, you can usually charge $36.80 per year per square foot. There has been no change in this over the past three months or over the past year. This price is higher than the state, metro, and county area.

Seal Beach Commercial Property for Lease – Getting the Best Deal

For small businesses in particular, the 30% down payment that is required for a commercial real estate property is simply too much. This is money that most don’t have or, if they do, they need to grow their own business. As such, a Seal Beach commercial propert for lease is the only viable option. However, you cannot simply jump into a lease either. Rather, you need to arm yourself with expert knowledge and professional services in order to get the best deal. This means that you must enlist the services of an accountant to manage your finances, and a lawyer to manage all the legal aspects of the transactions.

Find a Good Broker

Once you have those two on your team, it will be time to find a property broker. A little piece of good news is that the broker will usually be paid for by the landlord. However, you do have to decide which one of the two types of brokers you would want to work with. On the one hand, there is the tenant broker, who will do everything to make sure your best interests are served. However, such brokers will also ask you to sign a representation agreement, which means you are contractually limited to only view the properties that they have on their books. The other option is the leasing agent. However, while you can sign up with as many leasing agents as you want, their main role is to serve the interests of the landlord.

Negotiate the Lease Contract

After choosing your broker, viewing the properties you are interested in, and coming to a decision to lease one of them, the real hard work will begin. Few people know that leasing contracts are fully negotiable, which is something that sets them apart from residential tenancy agreements. Landlords hope that prospective lessees are not aware of their right to negotiate, thereby highly skewing the agreement in their favor. This is also why it is so important that you have an accountant and a lawyer fighting in your corner, as they will make sure that you get the best possible deal. Some of the main points they can negotiate on are:

  • The length and extent of your personal guarantee
  • How much you have to pay each month for the lease itself, and what that is based on
  • The type of lease construct 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 comes to an end
  • The possible rent increases, what they are linked to, and how much they are capped at
  • Where the responsibility for maintenance will lie
  • To what extent you are able to change the inside of the building and who will carry those 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 amount of security deposit

Clearly, leasing commercial real estate is quite a complex affair, so much so in fact, that you may feel purchasing is the much more viable option. However, there are four big issues that you have to remember when you purchase a property:

  1. You are subject to local ordinances and building codes. This means that you may still be limited in terms of how much you can change inside and outside of the property.
  2. You are subject to zoning, which means that you can only run certain types of businesses from your property. You can apply to be re-zoned, but this is a request you must pay for yourself, and you are not guaranteed to be successful.
  3. You have to put down a 30% deposit on the asking price, which is more than most people can afford.
  4. If you don’t use the property, or a part thereof, you will have to find a lessee yourself. This means that you have to go through the entire above list once again, only from the opposite perspective, which is that of the landlord.

The above demonstrate the pros and cons of both options and show why it is such a complex decision. There is one other option open to you, however, which is the commercial real estate investment trust, or REIT. This means that you come together with other investors, pool your money, and use it to purchase commercial real estate. This, too, has some disadvantages, however, such as the fact that:

  1. You have no control over the property, meaning you don’t get to decide who uses it, when it is sold, or how it is renovated to name but a few.
  2. You cannot use the property for your own business needs should you have a business yourself.

That said, investing in a commercial REIT also means that you can see your investment grow very rapidly. Commercial real estate is a popular investment option with low risks and high returns. If you have the opportunity to invest in a commercial REIT, therefore, you may want to consider it as an option. Furthermore, it means you don’t have to worry about landlord responsibilities, as this is all organized by the REIT as well.