Location, location, location. Those are the three most important words when it comes to real estate, right? Well…yes, and no. When you’re looking to expand your business, of course location is very important, but there are other factors to also consider to ensure a successful building project.
Whether you’ve outgrown your current space and need to expand, or you’re looking to start from scratch with a new, state-of-the-art facility, choosing a location is not always a simple task. Countless factors – natural, man-made, social and economic – must be taken into consideration.
Know your numbers
Do your financials line up to facilitate growth without hurting your current business? Prior to meeting with an architect or real estate agent, it’s a good idea to talk with a financial advisor, accountant or business banker (or all three!) to make sure you’re in a good position to expand. If you think you’ll need to take out a business loan for your project, a business banker can help you determine what kind of loan is best for your project and how large of a loan you may qualify for.
Talk with industry professionals
Prior to meeting with a real estate agent, you may want to talk to other licensed industry professionals, like an architect or civil engineer. They can give you feedback on what kind of things to look for in order to manage your risk when it comes to choosing a property. You can also do some online research on your own if you have a general idea of where you’d like your new location to be. You should be able to find information on things like traffic counts, zoning, municipality rules and regulations and what other kinds of properties are in the area.
Meet with a real estate agent
After considering the above, now you’re ready to meet with a real estate agent. An agent can help you find the type and size of property you’re looking for, but before making a purchase, be sure to reconnect with your architect or project manager to make sure the land will support your building needs. For example, if you’re building a factory that runs very heavy machines and equipment, building on a wetland may not be your best choice. Working together with your realtor, architect and other key professionals can help keep the lines of communication open, and alleviate any situations that may be difficult to resolve further into the process.
Here are some things to consider as you look for that perfect piece of property:
- Local geography. A site may require additional land beyond what’s needed for your building depending on local conditions such as topography, drainage or governmental regulation. You may not want to build on land that is too wet or sloping. These factors should be investigated early in the process.
- Zoning. Review the zoning ordinances of the locale, both local and county, to ensure your current and future uses will be allowed.
- Daily operations. How much traffic will be coming to and going from your plant, and how often? Consider things like access to interstates or even railways to get materials in and out of your plant. For example, businesses parks are typically easier to get in and out of than crowded downtown streets. Determine these things early on in your site selection process to help define the logistics of your new facility. Also consider how much space you will need for parking for both employees and customers.
- Utility and water costs. Once you determine the amount of square footage you need, work with an engineering firm or utility company to estimate utility requirements. These costs relate closely to your overall operational costs, so ensure an adequate energy supply source is conveniently available. Review your water and wastewater needs, keeping in mind that water consumption costs are heavily influenced by wastewater pre-treatment costs or surcharges.
- Environmental factors. This is a crucial one, especially for industries like food processing plants. Examine nearby industrial sites. Do they emit any pollution? Dust? Odors? These issues, as well as any ground contamination concerns are typically covered in an environmental assessment, usually ordered by a consultant at some point during the process.
- Location. Your location needs will vary depending on what kind of business you operate. If you’re a retail business that depends on visibility and easy access for walk-in customers, you’ll likely want to be located near neighborhoods, work and schools, perhaps in a downtown or city center area. If you’re primarily manufacturing, you’ll want to be in an area that has easy access to the type of transportation and infrastructure you need to get goods in and out of the plant. You may also want to consider whether there is additional room on the site for future expansion.
While the thought of a building project may seem overwhelming, it doesn’t have to be. If you stay in communication and discuss all options with the key players in your project – your architect, engineers, realtor and project managers – you’ll be able to effectively address any problems that pop up in the early phases, which may be difficult to fix later. Trusted industry professionals can help you do due diligence on multiple factors prior to finalizing a transaction…no matter how good a deal someone may be telling you it is.
Working with the right licensed professionals who understand the industry and are looking out for your best interests is the key to a successful building project.