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Capitalizing on a Weak Commercial Real Estate Market

August 5, 2011 | Small Business Loans

Both a surging economy and a downward spiraling economy will present opportunity to those who are prepared for it.  While many small business owners quiver at the thought of recession, it is also a time ripe with opportunity for renegotiating lease agreements or even purchasing commercial real estate.  In many instances, business owners only need to put 10% down on a commercial building when they utilize the SBA 504 Loan program.  The following article from the New York Times lays out various ways that business owners have capitalize on weak commercial real estate markets to improve their cash flow and begin building equity in their building…

From 2009 to 2010, the commercial real estate market in the United States seemed bottomless. Whether seeking manufacturing, office or retail space, those looking to lease or buy were in the driver’s seat, said Fred Schmidt, president and chief operating officer for Coldwell Banker Commercial in Parsippany, N.J. After the supply of space hit a peak in the fourth quarter of 2010, he said, the market began a slow recovery — “but it’s definitely still a tenant’s and buyer’s market.”

Many small businesses have taken advantage of the market to negotiate more favorable lease terms or lower rents or to move to better space. Some were able to buy a building, a pipe dream for many in the prerecession real estate market. Still, putting together a deal requires timing, cash and market savvy. The best deals take time and tenacity, so start looking long before your lease expires, said Brian Netzky, president of Interstate Tenant Advisors in Lincolnwood, Ill. “Don’t be reactive, because then no matter what the economy is like, you’re in the worst position.”

Below are several examples of small-business owners who have taken advantage of one bright spot in a dark economy. Read the examples. (article by Eilene Zimmerman, New York Times)

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