Buying Commercial Property: What to consider before you make the purchase

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Buying Commercial Real Estate

So, You’re Thinking About Buying Commercial Property…

Owning real estate is one of the most popular and historic methods to build wealth! There are many benefits including the ability to access financing that currently remains at historically low rates. It is a great time to invest in real estate, especially if you plan to occupy the property and/or rent a portion out…


However, there are some additional things to consider before you make that purchase…


  1. Maintenance Costs:

    • Just like your family home, Commercial Properties need “love & attention” so you should plan to reserve funds each month for repairs & maintenance. Do not forget about the largest costs: mechanicals, roof, parking lots, etc. as those can make or break the budget. The longer you plan ahead, the easier it will be to reserve the money needed for those costs…


  1. Management Fees:

    • Often times it is much easier to hire a Property Management Company (like BEI) because we have the experience to help maximize your investment returns while easing the demands of facility management. A Property Manager acts as your “customer service” team: fielding calls from tenants, working with vendors, managing projects, etc.


  1. Vacancy Factor:

    • This term is used to gauge the average occupancy of a property. The higher the vacancy factor, the higher the level of vacancy one might expect from a property. The vacancy factor is often measured against the total gross rents of the property but can also be converted into time. For example, a vacancy factor of 10% means that you might expect to see vacancy of 5.2 weeks p/year (or 10% x 52-Weeks). Vacancy fluctuates with macro and micro-economic trends – so be sure to speak with a skilled Commercial Broker that knows the specific-area to aid in this estimate.


There are many other considerations to factor when buying real estate, but finding the ideal property can be a great experience when working with the right partners. And, just like owning your family-home, owning something as tangible as Commercial Real Estate can be highly rewarding!


For more information or questions:


Contact Mike Algrim, Vice President and Director of Investments


[email protected]




BEI Commercial Real Estate is a locally owned property management, development and commercial real estate firm dedicated to investing in the communities. For 60 years Batavia Enterprises has been an active supporter and participant in local community events and is proud to have helped many local non-for-profit organizations. With properties in Batavia, Geneva, St. Charles, West Chicago, Elburn, Elgin, Sugar Grove and Rockford, the company can provide quality space to help growth and expansion for all types of businesses.

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