3 factors to consider when buying commercial real estate

On Behalf of | Jun 13, 2023 | Commercial Real Estate

Whether you are a real estate investor or a business owner, owning and operating a commercial property can be an excellent investment. But, before you take the leap and finalize the purchase of a commercial building, it may be advantageous to consider the following factors when searching for the right property.


Depending on your reason for buying a commercial building, the location of the property may be the most significant characteristic to consider. If your prospective property is located in the heart of Houston, it will undoubtedly be more expensive than if it were located 30 minutes outside of the city. However, some benefits are associated with this higher price tag. Buying commercial real estate in a large city allows you to be in close proximity to your potential customers and other necessary resources or infrastructure.


Before you seriously consider purchasing a commercial property, it is in your best interest to hire an inspector. An inspection will bring any significant issues to light and could save you time and money in the long run. Additionally, if you still plan on acquiring the property after receiving the inspection report, you will be able to plan for any needed future repairs.


When it comes to commercial real estate, properties are divided into three different classifications based on a variety of essential factors. For investors, these classifications are a vital tool because they provide key insights into the building’s current value, condition and history. Commercial properties are classified into these three categories:

  • Class A: Class A buildings are generally considered to be the safest investment for business owners or investors. This type of building will be fairly new, located in a large city, and have the latest features and technologies available. However, buildings in this category will also carry higher market values.
  • Class B: Class B properties are slightly older when compared to Class A buildings, but they also have a lower market value. Potential buyers looking at a Class B property can expect to find a building in a medium-sized market that may need some moderate repairs.
  • Class C: Commercial real estate properties that fall into the Class C category will often be a few decades old and require urgent repairs. Class C buildings may also be the riskiest investment as they are often situated in smaller markets.

Purchasing commercial real estate is a major step for investors and business owners alike. To ensure you make the right choice for your business or investment portfolio, having the experience of a commercial real estate attorney on your side could be beneficial.