Real Estate

Confused buying commercial real estate.

  • Last Updated:
  • Aug 17th, 2017 9:49 am
[OP]
Newbie
Aug 8, 2017
3 posts
1 upvote

Confused buying commercial real estate.

Hi all,
I am considering buying a commercial property. I know nothing about buying commercial property.

Browsing realtor.ca, I find myself easily confused as to whether the item for sale is the physical property and lot or the conceptual business with or without the property itself.

Is there an easy way to distinguish between the two that I am oblivious to? I'm only certain about the listings that explicitly state that the business for sale doesn't come with the property. I'm looking to invest in a building and rent it out.

Can anyone point me towards some resources?
30 replies
Deal Addict
Dec 21, 2010
1117 posts
301 upvotes
GTA
Hire a Realtor.
Award Winning Realtor - I LOVE MY JOB!!
At the end of the day, you're the boss and need to make sure I'm worth your rate of pay!
Sr. Member
Feb 16, 2013
547 posts
587 upvotes
Toronto
I wouldn't mind living in an industrial lot.
Member
Mar 30, 2017
204 posts
88 upvotes
Kurttt wrote:
Aug 9th, 2017 4:40 pm
Hi all,
I am considering buying a commercial property. I know nothing about buying commercial property.

Browsing realtor.ca, I find myself easily confused as to whether the item for sale is the physical property and lot or the conceptual business with or without the property itself.

Is there an easy way to distinguish between the two that I am oblivious to? I'm only certain about the listings that explicitly state that the business for sale doesn't come with the property. I'm looking to invest in a building and rent it out.

Can anyone point me towards some resources?
Image
you can filter out the type of listings: business, retail, office, land, etc
business means the actual business, not real property
retail means the real property for retail business

also some entry are not entered correctly anyway. you can filter out by price if the location on general is higher...like GVA a strata should be at least 100k+ minimal, that filter out a lot of small business for sale
Newbie
Mar 1, 2017
19 posts
25 upvotes
loriblum wrote:
Aug 9th, 2017 5:14 pm
Hire a Realtor.
99% of realtors have no idea what they're doing when it comes to commercial property. You need to do you due diligence when it comes to these properties.
Deal Addict
Dec 21, 2010
1117 posts
301 upvotes
GTA
Generalbrock wrote:
Aug 9th, 2017 11:46 pm
99% of realtors have no idea what they're doing when it comes to commercial property. You need to do you due diligence when it comes to these properties.
And you pulled your stats out of which hat?

Actually, you are incorrect. It takes many years to be regarded as a good commercial Realtor. We have the extra education needed to make transactions that are not nearly the same as a simple residential transaction. There are many necessities involved (ie soil testing, understanding the allowable uses for the space, applying for permits, more testing, the finances involved - not simple mortgages, etc....)

Don't discount what a true professional can offer. Taking "advice" from a board of people wanting to prove who got the better discount is NOT always the way to go; especially when you have admitted to having zero knowledge.

Do yourself a favour and align yourself with a true professional who is not there just to show you different sites. You clearly need someone who can help you differentiate between all of the terminology.
Award Winning Realtor - I LOVE MY JOB!!
At the end of the day, you're the boss and need to make sure I'm worth your rate of pay!
Newbie
Mar 1, 2017
19 posts
25 upvotes
loriblum wrote:
Aug 10th, 2017 7:53 am
And you pulled your stats out of which hat?

Actually, you are incorrect. It takes many years to be regarded as a good commercial Realtor. We have the extra education needed to make transactions that are not nearly the same as a simple residential transaction. There are many necessities involved (ie soil testing, understanding the allowable uses for the space, applying for permits, more testing, the finances involved - not simple mortgages, etc....)

Don't discount what a true professional can offer. Taking "advice" from a board of people wanting to prove who got the better discount is NOT always the way to go; especially when you have admitted to having zero knowledge.

Do yourself a favour and align yourself with a true professional who is not there just to show you different sites. You clearly need someone who can help you differentiate between all of the terminology.
While the 99% was a bit hyperbolic, I worked in a zoning department for nearly 10 years, so I've seen the very worst that incompetent real estate agents have to offer. I've witnessed the aftermath of real estate agents selling properties with hold provisions, draconian conservation regulations, and non-commercial zoning (the uses remaining were legal non-conforming). It's never fun watching a grown man cry at the counter, because the property he just bought for several million dollars is virtually worthless (unless he could find a greater fool to buy it off him).

That's not to say that there aren't some excellent agents out there, but they are few and far between. And generally, Joe Public isn't going to be working with a skilled real estate agent from CBRE (or similar dedicated commercial offices), who have extensive experience dealing with commercial real estate.

If you're buying commercial real estate, its imperative you do your own due diligence. Talk to the city and learn more about the property. You need to know about the following: zoning, conservation, road widenings, rail way setbacks, development charges, building permits, heritage designation, official plan designation, potential contamination, and parking regulations, just to name a few. Any one of those could severely affect the useability of the property and only a truly experienced commercial real estate agent would know to look into all that.
Deal Addict
Dec 21, 2010
1117 posts
301 upvotes
GTA
So we agree? I said that it takes an experienced commercial Realtor to provide the level of service and competence that is required in such a transaction.

I work in large scale commercial sales and I still encounter issues, including different regulations for different regions. It is not up to just the salesperson but the person who is making the application to be knowledgeable on all fronts AND to be aligned with the proper manpower and colleagues in all other departments. Even then we run into issues (ie secondary phase EA reports for soil contamination).

I stand by saying that the OP should hire a skilled Realtor. Along with this person should be a skilled lawyer, a skilled EA firm, etc....
Award Winning Realtor - I LOVE MY JOB!!
At the end of the day, you're the boss and need to make sure I'm worth your rate of pay!
Deal Addict
Jul 3, 2011
4439 posts
1707 upvotes
Thornhill
I can only imagine what a nightmare an offer for a commercial business or property in a even a small plaza would like like if cobbled together by someone who's not well versed in buying or leasing commercial real property never mind not even having the benefit of a commercial real estate course to draw on.

But some people think the general public knows everything but Realtors do not.
loriblum wrote:
Aug 10th, 2017 9:18 am
So we agree? I said that it takes an experienced commercial Realtor to provide the level of service and competence that is required in such a transaction.

I work in large scale commercial sales and I still encounter issues, including different regulations for different regions. It is not up to just the salesperson but the person who is making the application to be knowledgeable on all fronts AND to be aligned with the proper manpower and colleagues in all other departments. Even then we run into issues (ie secondary phase EA reports for soil contamination).

I stand by saying that the OP should hire a skilled Realtor. Along with this person should be a skilled lawyer, a skilled EA firm, etc....
Newbie
Jul 21, 2013
24 posts
4 upvotes
Vaughan
Generalbrock wrote:
Aug 10th, 2017 9:07 am
While the 99% was a bit hyperbolic, I worked in a zoning department for nearly 10 years, so I've seen the very worst that incompetent real estate agents have to offer. I've witnessed the aftermath of real estate agents selling properties with hold provisions, draconian conservation regulations, and non-commercial zoning (the uses remaining were legal non-conforming). It's never fun watching a grown man cry at the counter, because the property he just bought for several million dollars is virtually worthless (unless he could find a greater fool to buy it off him).

That's not to say that there aren't some excellent agents out there, but they are few and far between. And generally, Joe Public isn't going to be working with a skilled real estate agent from CBRE (or similar dedicated commercial offices), who have extensive experience dealing with commercial real estate.

If you're buying commercial real estate, its imperative you do your own due diligence. Talk to the city and learn more about the property. You need to know about the following: zoning, conservation, road widenings, rail way setbacks, development charges, building permits, heritage designation, official plan designation, potential contamination, and parking regulations, just to name a few. Any one of those could severely affect the useability of the property and only a truly experienced commercial real estate agent would know to look into all that.

THIS. SO THIS. We were also in the search for a commercial property and that search last 2 years and we went through about 10 realtors. 9 were crap. That's 90% crap. Knew nothing. I was convinced they only make money in the 'residential' sector thanks to the market cause when it came to minor challenges they were lost and could have easily misguided the buyers or trapped them in a deal that would sink most -small- businesses.

Anyhow, to answer your question on this thread, the same crap realtors are the ones that list these properties on realtor.ca. Also you'll be surprised how many properties won't go on realtor.ca cause they are only listed through property management websites.

The realtor we finally had success was found by literally driving around the area and taking pictures of the for-sale/for lease boards. We talked to 3 agents that had the biggest listings. Finally we worked with an agent with CBRE (one of the biggest in our area) and he was great. Private message me if you want his name but again, the agents and their expertise are very area dependent.
Deal Addict
Dec 21, 2010
1117 posts
301 upvotes
GTA
Did you begin your search by using 9 residential realtors? If so, the onus should be on you, the consumer, to have done better research. It really isn't that difficult to figure out who specializes in what (ie you wouldn't go to a car dealership if you're shopping around for a boat, would you!?)

So if you are saying that you had experienced 9 realtors who lacked the necessary skillset of what you were looking for then perhaps the problem did not lie with the Realtors? Just a hunch.
Award Winning Realtor - I LOVE MY JOB!!
At the end of the day, you're the boss and need to make sure I'm worth your rate of pay!
Deal Addict
Feb 2, 2014
4224 posts
856 upvotes
Toronto
Generalbrock wrote:
Aug 9th, 2017 11:46 pm
99% of realtors have no idea what they're doing when it comes to commercial property. You need to do you due diligence when it comes to these properties.
I also used to work in commercial real estate before going out on my own (SmartCentres and First Capital Realty).

Don't assume all (or 99%) of all realtors are clueless. There are a lot of agents who don't know much about the commercial side, but there are still a ton who do.
Kevin Somnauth, CFA
Mortgage Agent and Real Estate Sales Representative
Deal Addict
Feb 2, 2014
4224 posts
856 upvotes
Toronto
Kurttt wrote:
Aug 9th, 2017 4:40 pm
Hi all,
I am considering buying a commercial property. I know nothing about buying commercial property.

Browsing realtor.ca, I find myself easily confused as to whether the item for sale is the physical property and lot or the conceptual business with or without the property itself.

Is there an easy way to distinguish between the two that I am oblivious to? I'm only certain about the listings that explicitly state that the business for sale doesn't come with the property. I'm looking to invest in a building and rent it out.

Can anyone point me towards some resources?
As Seatiger already pointed out, look under property type.
Kevin Somnauth, CFA
Mortgage Agent and Real Estate Sales Representative
[OP]
Newbie
Aug 8, 2017
3 posts
1 upvote
Hi all,

Thanks for the insight. Here's some background information:

I'm 27, from brantford/Hamilton and currently own my very own fixer upper and first property. I'm hooked on real estate as a way to invest, and when I sell my house in the next year or so I am considering starting a business or buying a commercial property to lease out - possibly both.

Particularly, I am interested in buying a property that can be used as a sort of "game cafe". So my focus is mainly on restaurants, maybe some office spaces if they can be zoned for selling food and drinks. I find the real estate listings for reataurants quite confusing. Short of calling the selling agent, how can I tell distinguish between reataurant properties for sale and restaurant businesses for sale without the property they operate out of?

I'm admittedly new to all this and am looking for good resources. Securing a realtor is low on my list of priorities right now. I suppose it's free to use one to buy, but I will always sell my own properties. I'm not paying someone thousands of dollars for that service. It's criminal. But I digress.

I'm of the mindset that if I can pay someone else to do something, I can do it too. Unless specialized expensive equipment is involved. So where can I learn more about the ins and outs of commercial real estate on my own without relying on secondhand information from a realtor? There should be free information available somewhere online...
Sr. Member
Nov 2, 2014
840 posts
198 upvotes
Scarborough, ON
Kurttt wrote:
Aug 11th, 2017 1:57 pm
Hi all,

Thanks for the insight. Here's some background information:

I'm 27, from brantford/Hamilton and currently own my very own fixer upper and first property. I'm hooked on real estate as a way to invest, and when I sell my house in the next year or so I am considering starting a business or buying a commercial property to lease out - possibly both.

Particularly, I am interested in buying a property that can be used as a sort of "game cafe". So my focus is mainly on restaurants, maybe some office spaces if they can be zoned for selling food and drinks. I find the real estate listings for reataurants quite confusing. Short of calling the selling agent, how can I tell distinguish between reataurant properties for sale and restaurant businesses for sale without the property they operate out of?

I'm admittedly new to all this and am looking for good resources. Securing a realtor is low on my list of priorities right now. I suppose it's free to use one to buy, but I will always sell my own properties. I'm not paying someone thousands of dollars for that service. It's criminal. But I digress.

I'm of the mindset that if I can pay someone else to do something, I can do it too. Unless specialized expensive equipment is involved. So where can I learn more about the ins and outs of commercial real estate on my own without relying on secondhand information from a realtor? There should be free information available somewhere online...
Buying a commercial property without a legit qualified realtor seems like crazy talk to me...

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