Commercial Real Estate: Assessing The Unique Features Of Commercial Real Estate Parcels

As commercial real estate development progresses into the 21st century, many of the principles upon which the market was founded remain the same. Whether you are a property owner, developer, or commercial real estate agent, identifying and marketing the unique features of your commercial property will maximize the attractiveness of the site to prospective buyers or tenants.

Depending on the highest and best use for the property, you may be able to attract a wide spectrum of potential buyers to your site. In addition to basics such as price or zoning, experienced buyers ? local or national ? will consider several key factors of each potential site, including:

? Location and visibility

? Any existing physical improvements on the site

? Average daily traffic count, or ADTC

? Site access

? Utility availability

? Environmental status of the property

? Any existing or planned surrounding commerce

Let's explore some of the primary features of commercial land, and how each is interpreted by buyers.

Location, Location, Location

Because real estate is finite, location is a fundamental consideration in the purchase decision formula for buyers. Unless a property is undevelopable, each site has unique benefits that will meet the needs of a buyer seeking a particular criteria. Increasing the number of potential buyers is dependent on efforts to realize and market the full value of a parcel's location.

Location not only encompasses city and state, but also variables such as traffic arteries and surrounding commerce. Research neighboring parcels to learn what sort of future commerce, residential communities, or roadways are planned for development.

Aerial photos are a great way to showcase a site's potential. Google's free satellite mapping service provides detailed aerial images for most of the United States. To view your property, visit: http://maps.google.com.

Existing Physical Improvements

Contrary to popular belief, existing physical structures on a parcel may hinder a property's value, as opposed to increasing it. If a site has exceptional location, access, and traffic, but includes a functionally obsolescent structure, the cost of razing the structure will be a primary consideration for any prospective buyer.

If your property includes an obsolete or deteriorating structure, consider razing the structure before marketing the site. Incorporating this expense into the asking price is oftentimes easier and more profitable than deducting it from the price during negotiations with the buyer.

Average Daily Traffic Count (ADTC)

The amount of daily traffic traveling on nearby roadways can be an excellent selling point for even the most difficult properties. Many counties maintain Average Daily Traffic Counts (ADTC) records for major roadways. If the property is located near or adjacent to an intersection, acquire the ADTC for both roads. Prospective buyers will appreciate these figures being readily available in the site's marketing materials.

ADTC is a significant factor particularly for national entities, such as quick- and full-service restaurants, gas/convenience stores, hotels, and other entities that depend heavily on daily traffic patterns to draw patrons.

Site Access Options

Site access ? that is, legally permissible access to the site from nearby roadways ? can make or break a transaction. Even the best site can become a lemon, depending on access limitations.

Generally speaking, there are two types of access to a site. The first is "full" access, for oncoming traffic from both directions. Depending on a roadway's existing configuration, this may require the installment of acceleration/deceleration lanes, blisters, or traffic signals.

The second (and less favorable) option is "right in, right out" access, which limits vehicle access to right turns from a single lane of traffic. Because right in, right out limits the site's access to a single direction, depending on the ADTC of the affected lane, this may limit the interest of certain buyers.

If a site has potential for broader access options, the property owner may want to consider requesting a modification from the applicable municipality. Performing this legwork before placing the site on the market will significantly increase potential for realizing the full asking price.

Utility Availability

Although still common practice in many areas, properties that employ well and septic systems are regarded as secondary sites in comparison to those with modern utility infrastructure.

The cost of bringing utilities to a site may be a significant factor to some buyers. If possible, property owners should consider having electric, water, and sewage improvements brought to the site before marketing the property. Again, such a preparative measure can optimize conditions for realizing the site's full asking price.

Environmental Concerns

With a rapidly growing number of potential environmental issues, buyers have increasingly made environmental site assessments a contingency in their purchase agreements. This is a must in transactions involving properties prone to environmental issues, such as aging gas/convenience stores, as well as parcels adjacent to these entities.

The expense of an environmental assessment can be worth its weight in gold. A seller can be held liable for undetected environmental property defects, even after a transaction is consummated. The key to a successful transaction is full disclosure.

If it is determined your property has environmental issues, such a status does not make the site broadly undesirable. The cost of clean-up can be integrated into the asking price, made the responsibility of the buyer, or even shared between both buyer and seller. Other unrelated factors, such as location or ADTC, may outweigh negative aspects of the property.

Surrounding Commerce

Surrounding commerce can play a significant role in the future of any property. Even if physical structures have yet to be developed, knowing the plans for nearby parcels can help determine the highest and best use of your property.

If your site is located within an expansive commercial district, you'll have little difficulty in identifying surrounding commerce to determine potential uses for your property. Conversely, if the site is located in an area gradually shifting from residential to commercial use, or a tract of vacant land with minimal surrounding commerce, it will be necessary to speak with other property owners as well as the county assessor to determine future development plans for adjacent properties.

Becoming familiar with the unique features of your commercial property is the best way to achieve a maximum ROI on your investment. A competent commercial real estate agent will have to skills and resources necessary to help property owners research these important aspects of their property.

Jim D. Ray is a parapsychologist with a diverse background in multiple subject concentrations, including business, psychology and parapsychology, criminal justice, philosophy, education, internet technology, physics, and vocal performance arts. Jim can be reached by e-mail at: jray@web-presence.net.

---

Moving On: Powerful Tips For Selling Your Home

Maybe you're moving to a larger home to accommodate a... Read More

Fraud in Real Estate, Are You Being Victimized? - Part II

The phone range and Peter was on the other end... Read More

Why Are Mortgage Notes Discounted Anyway?

When real estate note brokers purchase partially paid notes, they... Read More

Tax Deferred Exchanges of Investment and Business Real Estate

The Primary Residence taxation, the Residential Replacement Rollover, Sec. 1034... Read More

Buying Outer Banks (OBX) Investment Property

So, you're thinking of purchasing a rental property... Read More

Small Town Stone House with a Long History

As a native Midwesterner, the first thing I noticed when... Read More

Questions Investors Should Ask When Buying and Selling Investment Property

If you're a real estate investor, here are several questions... Read More

Escalation Clauses ? A Home Buyers Secret Weapon

Today we discuss escalation clauses because much of the country... Read More

A Real Estate Primer

There are a great many books and web sites devoted... Read More

Real Estate: A Strong Investment

Description: Even in uncertain economic times like these, history shows... Read More

You Have 15 Seconds to Sell Your Home! 11 Steps You Can Take to Sell Your Home for Top Dollar

Selling your home? Here are some suggestions to help you... Read More

A Singles Game of Real Estate

This discussion leans toward answering questions asked most often by... Read More

Walnut Creek Real Estate

Looking to relocate to a Californian suburb with a low... Read More

When is the Best Time to Move?

As Realtors, we are often asked, "When is the best... Read More

10 Important Tips to Successful Real Estate Investing

When it comes to investing, everybody has certain goals and... Read More

Buying Overseas Property

Fourteen Top Tips for Overseas Property Investment:1. Buy what you... Read More

How Real Estate Investors Use Mortgage Note To Purchase Properties

Many of you may not be aware of the various... Read More

Purchasing Land: What To Look For

It doesn't take long to realize that finding the right... Read More

How Long Your Mortgage Runs Determines How Much You Pay

The first thing most of us think about when the... Read More

How Do I Implement The Lease Purchase Plan?

Well, as we have discussed in previous newsletters first you... Read More

Product Review of Carelton Sheets No Money Down Course

Real estate continues to be a very important part of... Read More

Making Money In Real Estate - 10 Ways

Making money in real estate is an endless topic that... Read More

The Great Real Estate Bubble Quiz

You hear it asked on the radio, in the newspapers... Read More

How to Sell Your House For Full Price

Many people believe that a real estate broker is needed... Read More

Escrow From a California Homeowners Perspective

The Escrow ProcessBoth Buyer and Seller deserve the assurance that... Read More

Be Careful - A Real Estate Agent Could Lead You Astray

The real estate agent is a valuable source of potential... Read More

The Ultimate Short Sale Secret

Buying foreclosures can be extremely profitable for real estate investors.... Read More

A Simple Step by Step Aproach to Fail Your Way to a Million Dollars

If You want to be Financially Successful you need to... Read More

Renting a House

Renting a house or a room in your home is... Read More

What Should You Do If Your Home Isn?t Selling?

It can be very frustrating to put your home on... Read More

FSBO: For Sale By Owners Chapter IV [part 1]

Like a monarch, Red Haring reigned in the deep leather... Read More

Juggling The Day With A Deal

Doing deals with sellers is why you went into lease... Read More

Selling Houses: Design Psychology and Interior Colors

Interior colors are vitally important to selling your home quickly,... Read More