Lessons Learned as a Commercial Real Estate Broker in Frederick
The housing market has changed a lot over the years, but the commercial real estate landscape has pretty much remained the same. That doesn’t mean, however, that there aren’t some lessons to be learned about commercial real estate in Frederick.
Obviously, there are some changes – cost being a major one. Let’s take a look at some of the lessons you can learn about commercial real estate in Frederick.
Things have gotten more expensive to build over the years, but rent hasn’t gone up to pay for it. Because of this, landlords are making less money. There are few reasons why the rent hasn’t risen that much in the past 10 years.
- The Economy: The economic downturn several years ago created a surplus of office spaces on the market because businesses failed. There are a lot of empty office spaces all over the place because of it.
- Location: People who build new spaces in certain markets can’t really get a higher rent number because there are so many other alternatives you can go to. You might build a new 50,000 square foot office building, but there are three older 50,000 square foot office buildings that people left available for the same price they were six years ago. You can’t really charge more for your building because they’ll just go to that other building.
In Frederick, a good example of the location problem is a business near the Westview Shopping Center. This company is leaving office buildings in stages, so they’ve repositioned the inside by putting in new flooring, new lights, new bathrooms, and they’re leasing it for the same price they would have 10 years ago.
All of this is a combination of economic conditions and competing properties who have less money in the building, so they can lease it for less money and get a big return. People will go to places that cost less, especially if they have a business where people don’t need to come in and see them. In this case, there’s no prestige in having a nice office building, other than to make your employees feel like they’re prestigious.
A good lesson in commercial real estate is timing. There are a couple of different factors in timing.
“I need to move and my lease expires in a few months.” If you wait until it’s two months out, you’re a little behind the 8-ball. You should have started looking six months ago.
Timing also includes not looking forever – make a decision. Some people will call in January when their lease expires in September and, after seeing a property, they’ll say “That’s nice, but I think I want to wait for something a little nicer.” They wait to make the decision at the last minute and, by that time, the landlord has already leased it to someone else. Sometimes your opportunities go away while you’re waiting for a better one.
There are also people who say they’re looking for a new property, and after looking at several properties, will decide to just renew their contract and stay where they are. Basically, they’re just window shopping, but it doesn’t mean they weren’t interested. A lot of it is the fear of the unknown. When people move, they’re excited in the beginning, but it takes a while before it hits them, “Am I really going to pull the trigger on this?”
Timing also comes into play when it comes to communication, which inevitably holds up the process. Landlords take a long time to respond questions. Tenants take a long time to think about the response to the questions in order to move on to the next step or to ask another question. It’s not uncommon for a question to take seven to 10 days just for someone to answer, whether it’s the tenant or the landlord.
Know the Aging Buildings
There is a lot of commercial real estate in Frederick that is getting up there in age. Some are even protected by the Historical Society because of their age. The average, aging building, though, needs to be remodeled or repurposed.
If, for example, you take a look again at the property near Westview – with the new lighting, flooring, artwork, etc., it looks like a new building, even though it’s older.
As these older buildings become vacant, the landlords need to be aware that they need to bring the aesthetics of the property up to modern-day standards. If you own a property that was built in the 70s or 80s and the carpet hasn’t been replaced and they’re still using tube florescent lighting instead of LEDs and they still have teal or mauve walls, it’s not going to work out well for you. People will go down the street to another property where the rent will be the same, but the property will be in much better condition.
Bringing in Professionals for Commercial Real Estate in Frederick
It’s hard doing all of this without having some help. Whether you’re looking for a property manager (which you don’t really want to do yourself) or you’re looking to move into a new property, it’s always easier to handle the load when someone with experience guides you.
The experts at Blackwolf Commercial have helped people just like you in Frederick for more than a decade. We know all of these lessons because we live them day in and day out. Want to find a great property in Frederick without paying an arm and a leg? We’ve got you covered. Need someone to manage your investment property? We can help with that, too.
You don’t have to go it alone. Blackwolf Commercial can help guide you every step of the way. To find out about commercial real estate in Frederick, or to learn more about our services and what we have to offer, contact us today. We look forward to helping you.