Monthly Archives: March 2019

Mortgage Options When Buying an Office Building

Perfect office spaceBuying an office building can provide a lot of opportunities. It adds to the business assets. Provides a permanent place for your business and it can provide overflow space to lease which can help with mortgage payments. Generally to qualify for a mortgage you must own at least 51% of the property. If you are trying to decide whether to continue leasing or buying an office building for your company, checkout our lease vs buy considerations.

Types of Mortgages

Traditional

    This is usually offered by banks in order for you to purchase properties. It is more comprehensive than the other loans with no maximum limits and fit for the long-term. The basic requirement is that it must be owner-occupied and the property value meet the bank’s loan to value requirement. A good credit rating, not lower than 700, is needed and your business must have a good performance for the last 2 years of its operations. In other words, it may be difficult to qualify in this option.

Another option to help with financing a business property loan may be to take out a mortgage on your home. You might want to check out the best of 2019 to find the best lender for you.

SBA 7(a)

Short for Small Businesses Administrations, this type of SBA can be used by business owners to buy different properties assuming the property is owner-occupied. As much as $5 million can be borrowed under this option. This can also be amortized for 25 years with fixed interest rates. Therefore the monthly payment will be fixed until the entire loan is paid in full. To qualify, the property must be owned at least 51%, with a credit score of at least 680 and the business has been existing and performing well in the last 2 years.

SBA 504 Loan

    This type of loan is also good for the long-term because there are no maximum limits. More so, it is comprised of 2 loans coming from banks, which will provide 50% of the total amount and from the Certified Development Company (CDC) to provide 40%. However, the remaining 10% will be provided by you. For example, if you are borrowing $10 million, 5 million comes from the bank, 4 million from CDC and 1 million from you. Like the other options, the property must be owner-occupied at least 51%, with a credit score of 680, and it should be an established business with at least 3 years of operations.

Conduit Loans

    This one is different from other loans as the mortgages are pooled together and eventually will be sold to a secondary market. As expected, the behavior of this loan will also be different. The lowest possible loans amount to $1 million up to $3 million with 10 – 30 years amortization. Likewise, terms of payment are fixed, together with the interest, but it is much lower compared to a traditional mortgage option.

Commercial Bridge Loans

For short-term purposes, commercial bridge loans may be a suitable one until further long-term funding is available. It is supposed to bridge the gap when there is no long-term financing yet, but you need to secure a property. Companies use this in minor projects such as renovations, repairs, and other fixtures. One of the advantages is that you can easily qualify here. You just need to show that you have been successful in the last 3 projects you were involved in, and a credit rating of 700. The amount that you can loan is just equivalent to your net worth. Furthermore, it is also easy to pay since it requires a low down payment.

Commercial Hard Money Loans

    This is similar to commercial bridge loans, however, hard money loans are offered by private companies. It is also for short-term uses such as renovations, small projects, and others that may be closed upon the completion of the project. The qualifications are not that strict compared to traditional loans.You just have to have a credit rating of 600, successful in the last 3 projects, and you should have a proof of downpayment. However, since it is short-term, the interests are higher.

Soft Loans

    This type of loan is like the hard money loans that are intended for short-term uses. The difference is that it bases the approval, not on the down payment, but rather on the strength of the application which is the credit rating. When approved, you may enjoy lower down payment and interest rates, and longer term of payment.

As you can see, when buying an office building there are quite a few options on how to finance it.  You can find out more Information here.

If you’d like assitance in finding and negotiating for an office building to purchase, we have a team of top notch brokers who can help. Contact us today!

The Importance of Your Office Location

Helpful tips for coworkingThere are many factors that can contribute to the success of your business. It includes your people, product, service, as well as customer service. All of which can be directly associated with your office location. Sometimes your office location can make or break you. It is important to both your customers and employees, so you need to take care in deciding on an office location for your business.

Let’s take a look at how your office location impacts your business.

Related Business

Do you ever wonder why gas stations are situated next to each other? Or why convenience stores pop up one block, face to face with one another? In business there is a term called benefit of localization. People tend to flock to a place where there are many options than an area with less choices. Not only does this keep you close to your market, but it also helps you to check in with your competitors from time to time.

In addition, if you are just starting out with your business finding an office space in an area known for your industry will help you get customers or clients and employees… A well-established area means people are aware that it is a place business like yours locate offices.

Where is the Talent

Your employees are the life-blood of your business. They are the ones that operate it and keep it running smoothly. The location of your office can contribute to the quality of talent available for hire. The availability of talent pool likely depends on your physical location because of a major factor, transportation.

If you are in an urban area you will have a higher talent pool than if you are in a rural area simply because of population. Also, how easy is it to get to your location. People will be attracted to how easy it is to get to your office.

As an example, if you are trying to staff doctors, a job near a medical school is a good choice because of  those students will be looking for jobs after graduation. The same goes for lawyers and law school. These students are familiar and comfortable in the area because they’ve spent so much time there.

Balance Your Expenses

Renting an office space can be expensive. It is probably one of the top expenses of your operating budget. What you need to know is the pros and cons of your options. A few questions to ask include: Will spending a little more money on a better location generate more business or not? If so, how much more. How about your employees? Will a higher priced location make a difference in your retaining or attracting good talent? The answer to these questions can help you determine what is best for your company.

Zip Code Envy

When you hear 90210, you know that it is an expensive area. There is a zip code like that in every city. One that you just know is expensive.  It is teh same with a business location. If a business is in a downtown area with a downtonw sip code, that signals they are serious. If you think a business is serious, that must mean they are doing well and are good at their job.  This will help customers and employees have a good impression of you. When you are planning your office, think about what a zip code can do for you.

Location, Location, Location!

As with all real estate the three most important considerations for your office is Location. The wrong location can cause long term problems with customers and employee. Have an experienced tenant rep working for you will provide you the benefit of having someone who can provide insight into the office options you have.

Getting Reliable Help

If you need help finding and negotiating for office space, contact us and we will put you in touch with a great tenant rep who will help you at no cost to you.

How To Make The Most Out Of Your Office Space

Office spaceRunning a company involves a lot of implementation and execution of necessary business plans and procedures to run an office. These are not limited to things inside the office; it’s also essential to establish relationships between your business and potential clients, as well as the relationship within your team. If you’re starting your company from scratch, you have to look for a place to establish your business or office.

Here are some ideas on how you can find the perfect place to transform into an office space, and the ways how you can maximize the area:

Finding an office area

The first thing you need to establish regarding office spaces is where the physical location of your office will actually be. Usually, you’ll look for a space for lease in a commercial establishment or a building.

However, if you have long-term plans of establishing your company with a large headquarters, or you simply want your own office building, you might want to consider looking for infrastructures that you can convert to an office building, such as warehouses, abandoned buildings, or even former churches. There are some accounts of former churches that have been transformed into an office space because of their high ceilings, which can be remodeled to create multiple floors.

Some churches would have a larger parking space and lawn, with LED signs for churches that you can transform to accommodate your company’s branding and logo. Here’s an example video about LED signs, which can also serve as your guide in establishing your business’ branding and marketing strategies:

Maximizing Your Office Space

Once you’ve selected the place where you’ll establish your office, here are ways on how you can maximize the space you’ve chosen:

  1. Use a common office space

You will notice that as your business grows, it will be more difficult for the existing labor to keep up with the demands of the company, and the best solution for this is to hire more office staff. However, your office space has limited capacity because of the floor area. You’ll be having a hard time squeezing in a lot of employees to fit in comfortably inside the office space.

The best way to maximize the number of people in a limited space is by using a common office space. The office trend nowadays has shifted from rooms and cubicles to common office spaces consisting of long office tables. The improvement in technology from desktop computers to laptops has also made this adaptation possible in an enclosed office area.

A common office space setting also encourages more interactions between team members, thus improving communication skills and increasing camaraderie among employees.

  1. Declutter your area

A clean office space invites a positive vibe that enables your employees to work more productively and efficiently. Keeping it clean and well-organized will allow you to identify areas that can still be maximized.

You can adapt the 5S methodology to declutter:

  • Sort similar items in a single location and remove unnecessary items out.
  • Straighten all necessary items that have a similar function in a space in the workplace.
  • Sweep and clean your workplace on a regular basis.
  • Standardize procedure in sorting and organizing items in the workplace.
  • Self-discipline among all team members is essential in observing standard decluttering procedures in the workplace.

Also, keep your office furniture simple and minimalistic so it will not appear crowded.

  1. Try to reduce the paperwork

It’s easier to reduce paperwork because of technology, which allows online collaboration where you and your colleagues can access and work on a single document all at the same time.

Switching to electronic data management also reduces the need for storage cabinets designated for all your paperwork. External hard drives and cloud storages replace the large, metal cabinets that take too much space in the office.

  1. Improve lighting

If your office space has a lot of windows, make use of natural lighting as much as possible. This way, the entire office area will look bigger and brighter, which will bring about a lot of improvement in terms of the workspace environment.

Use LED lights and minimalistic lamps so that it will not take too much space, which also allows you to save on electric costs. As for the windows, avoid using heavy curtains and draperies; switch to blinds and roman shades, which take up less space.

Final Thoughts

Finding the best area to transform into your office space should not be restricted to leasing spaces in a commercial establishment or a building. You can tap other alternatives, such as transforming warehouses and even former churches to create your office. Arranging an open area, limiting clutter and paperwork, and improving the lighting will maximize your office to create a lighter working environment that adds up to your employees’ performance and efficiency at work.