Author Topic: Commercial property, what do I do?  (Read 1163 times)

BTDretire

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Commercial property, what do I do?
« on: October 16, 2020, 12:36:36 PM »
Long story short, I ended up with about 1.8 acres on a moderately busy street (9500 daily). It is zoned commercial. I'd like to develop it, I know what the area needs is what needs to be built. But I'm asking for suggestions about what types of commercial enterprises I should look into. Please just throw out all kinds of ideas.
I just need a starting point of things to look into. It is next to an intersection, which has a gas station and a convenience store.
Brainstorm for me. Thanks


mozar

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Re: Commercial property, what do I do?
« Reply #1 on: October 16, 2020, 12:47:06 PM »
I would love to brainstorm for you but all real estate is local, needs change even from block to block, so I'm not sure how I could help without knowing where it is.

chemistk

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Re: Commercial property, what do I do?
« Reply #2 on: October 16, 2020, 12:59:50 PM »
Mini strip mall? Restaurant? Car Wash? Farmer's Market?

I agree though, without knowing some more specifics, there's really not much to go on. Within a mile of my place, that type of property would be best used as fast/fast casual food.

One town over, it would be better as a mini (5 or fewer storefronts) strip mall. Highly dependent on local demographics.

BTDretire

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Re: Commercial property, what do I do?
« Reply #3 on: October 16, 2020, 02:21:30 PM »
I would love to brainstorm for you but all real estate is local, needs change even from block to block, so I'm not sure how I could help without knowing where it is.

 Ya, that's why I just wanted ideas thrown out, so I could pick some that seem like they might fit and research them.

AMandM

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Re: Commercial property, what do I do?
« Reply #4 on: October 16, 2020, 05:19:26 PM »
In my neighbourhood there is an intersection that has a gas station and a convenience store. Here are the businesses within a block of that intersection:

Ice cream shop
Bakery
Liquor store
Pizza place
Fast food chain
Barbershop
Used car lot
Post office
Small Latin grocery store
Aldi
Rent-to-own furniture store
Bank
Restaurant (3)
African goods store
Pawn shop
Laundromat
Combination florist & bridal/prom/quinceanera dress shop
Tax preparer
Phone/check cashing/western union place
Karate studio
Dentist

And several of the shops have a second story above with businesses such as tag & title, notary/translator, a jewelry store, insurance agency.

Does that help?

BTDretire

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Re: Commercial property, what do I do?
« Reply #5 on: October 16, 2020, 06:19:39 PM »
Thanks AMandM!

Chrissy

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Re: Commercial property, what do I do?
« Reply #6 on: October 16, 2020, 06:21:14 PM »
Yeah, next to a gas station, I'd say put in other errands people do on their way to or from work:  dry cleaner, cafe, fast food, bank, grocery.

terran

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Re: Commercial property, what do I do?
« Reply #7 on: October 16, 2020, 10:58:22 PM »
I think you're going about this backwards. Do you want to run a business or do you want to rent to someone who wants to run a business? If you want to run a business then you should figure out what kind of business you want to run and then figure out where the business should be located independent of where the property you own is located. You can sell this property and buy another one if it's not located where the business you want to run should be located. If you want to rent to someone who wants to run a business you should find an experienced local commercial real estate broker to help you find a business owner who needs a location and then build out the property for that business rather than trying to guess what type of business might want to rent your property.

Malcat

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Re: Commercial property, what do I do?
« Reply #8 on: October 17, 2020, 07:24:37 AM »
I think you're going about this backwards. Do you want to run a business or do you want to rent to someone who wants to run a business? If you want to run a business then you should figure out what kind of business you want to run and then figure out where the business should be located independent of where the property you own is located. You can sell this property and buy another one if it's not located where the business you want to run should be located. If you want to rent to someone who wants to run a business you should find an experienced local commercial real estate broker to help you find a business owner who needs a location and then build out the property for that business rather than trying to guess what type of business might want to rent your property.

Yeah, I'm also confused by this post.

Are you looking to do an "if you build it they will come" kind of situation where you decide what kind of business you want there, build it, and then hope someone comes and rents it from you?

Or are you looking to start a business yourself?

These are two wildly different scenarios.

LWYRUP

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Re: Commercial property, what do I do?
« Reply #9 on: October 17, 2020, 07:38:04 AM »
If you just want cash and want to do no work, you could ground lease the land to someone for a very long time and they put a building on it.  However, a lot of people will not want to invest capital in a ground lease.

Real estate brokers will tell you a long term ground lease is basically the same thing as fee.  I've read the ground leases and disagree.  I really dislike it when my company does ground lease deals.  It just makes me leery when we pour millions of dollars into something and someone can go sue us to take it away if they don't like us.  In reality, I know none of the ground landlords gives a crap if the checks keep coming, but there are often other default scenarios listed in the ground lease.  Also, if there is a temporary liquidity crunch you could lose the value of your improvements because you were short on cash for a while!  You could try to "sell" your ground lease interest, but I suspect the market for distressed ground lease interests are not very liquid.  So, it's always been my opinion that the "unsophisticated common sense" opinion of not liking ground leases is in fact reasonable. 

Another thing you could do is sell the land.  Then you get cash.

Things like gas stations and dry cleaner facilities come with environmental risk.  So you can make a lot of money if you want to take the risk, then it will hurt future resale.  But I am guessing a gas station company WILL actually be happy to do a ground lease and put up the station themselves.  They're probably HAPPY not to the own the land, in case there are issues. 

You can probably get an appraiser to do a market study based on different types of uses.  So, you may want to do that before throwing down serious cash.

Developing real estate takes a LONG TIME and a LOT OF MONEY.  It's not for the faint of heart.  This is why it's increasingly done by big corporations or really, really rich people, and people like me just serve them because we only have a little bit of money. 



reeshau

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Re: Commercial property, what do I do?
« Reply #10 on: October 17, 2020, 08:46:18 AM »
I think you're going about this backwards. Do you want to run a business or do you want to rent to someone who wants to run a business? If you want to run a business then you should figure out what kind of business you want to run and then figure out where the business should be located independent of where the property you own is located. You can sell this property and buy another one if it's not located where the business you want to run should be located. If you want to rent to someone who wants to run a business you should find an experienced local commercial real estate broker to help you find a business owner who needs a location and then build out the property for that business rather than trying to guess what type of business might want to rent your property.

+1
Don't become the commercial equivalent of an accidental landlord.

BTDretire

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Re: Commercial property, what do I do?
« Reply #11 on: October 17, 2020, 09:00:13 AM »
 I can end this with the ideas generated. I have not given full details and don't plan to.
I want to enhance the value of the land for the future, with a plan of development,
                     Thanks all.
 

Fishindude

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Re: Commercial property, what do I do?
« Reply #12 on: October 17, 2020, 09:27:32 AM »
First thing I would do is put a sign on the lot advertising "Will Build to Suit" on this lot.
Then I'd try to find someone that could afford a 10-15 year triple net lease that would pay the project off, plus give me a little spending money as it did so.

Some neat businesses that I might consider doing myself would include:
Mini storage warehouses
A car wash
A Laundry mat
Twice the ice vending unit

 

Wow, a phone plan for fifteen bucks!