Many business owners in California find it difficult to qualify for a mortgage when they wish to purchase or renovate a piece of commercial real estate. Conventional lenders generally look at only established cash flow when they assess a business application, and the increased revenue that the property will bring into the company is not usually considered. Another challenge facing entrepreneurs is the strict loan to value guidelines that lenders follow, which can make things difficult for business owners who are not able to put a significant amount of money down.
When a business is choosing a new location in California, it is important to research the commercial zoning ordinances and regulations that apply to it. Commercial zoning laws prescribe that certain areas be used in certain ways. Just because a prior tenant used a location in a certain way, if its use was nonconforming, a new business may not use it in the same manner.
California landowners and investors may be interested in learning more about the implications of recent commercial real estate surveys. Researchers project that rental rates for apartments will increase by more than 3 percent annually up through 2017. Rental rates in the office sector are projected to increase by 2.5 percent, and warehouse rentals are expected to increase by over 3.5 percent each year.
There are many factors that need to be considered when choosing space in an office or commercial building in California. For instance, it is important that the building is in an area that is zoned for the type of activities that the business will conduct. It is also a good idea to inspect the building to ensure that it doesn't need significant repair work. However, if repairs are necessary, it should be clarified whether or not the landlord will take care of the needed work.
By the authority given under California state law, municipalities have the right to place zoning restrictions on the use of land. Cities use zoning as a tool to control development and plan for future growth. If a zoning decision has affected a person's ownership or use of commercial real estate, however, there are several options to challenge it.