Commercial real estate is one of the slower areas of the LBI real estate market. Most of the commercial real estate is located on Long Beach Blvd but there are a few commercial properties on Central Ave in Ship Bottom and some areas of Barnegat Light. Commercial real estate on Long Beach Island can offer some great opportunities for a buyer or a seller if they are aware of how to price the current market. Commercial real estate is an investment and as such, the number have to be viable in order for a commercial property to sell on Long Beach Island. It is important to remember that with commercial real estate we will not see a lot of showings…but the showings we see will be serious buyers.
When looking to buy or sell in the commercial real estate market on Long Beach Island it is important to understand that there are some great differences between commercial real estate and the other forms of ownership on LBI. Commercial real estate is less about emotion and more about the “bottom line” so it is important to understand what makes a successful business on LBI and what is required to make the commercial investment worthwhile!
For those looking to invest in the commercial real estate market on Long Beach Island there are three options available. They are a commercial lease, a lease with the option to purchase or a straight commercial real estate purchase. Each has benefits and disadvantages so it is important to understand each when looking at commercial real estate on LBI. A commercial lease offers a minimal upfront investment which allows the business owner to invest more into their business. A commercial real estate purchase can benefit from the possible appreciation of the land value in the transaction however the purchase of real estate requires a major upfront investment before having to invest money into the business. A lease with the option to buy is arguably the best form of investment in the commercial real estate market on LBI as it allows for less upfront money but still offers the ability to benefit from the ownership of real estate once the business is established.
When looking to invest in the commercial real estate market on Long Beach Island, it is important to understand the current trends in the local market. While commercial lending can be difficult, many owners are willing to finance a commercial project in order that they can help to move the transaction forward.
There are some important things to keep in mind when looking at a commercial real estate transaction. First and foremost, every transaction is different and they are typically quite different from a residential real estate purchase. It is important to discuss your individual situation with a commercial bank, however there are some generalizations that can help a buyer to understand both the commercial real estate market and commercial loans. For example:
In the world of commercial financing, many people assume that simply having good credit will all but guarantee qualification for a loan. Commercial loans look at several factors, including good credit which is more of a requirement that it is a bonus. Having additional equity or having an established business background are also highly advisable, is not required to qualify for a loan. Commercial loans will typically see between 20% and 25% require down payments on a transaction.