5 Considerations When Purchasing Industrial Properties in Colorado Springs
The purchase of a commercial property for a business can be an exciting and profitable acquisition if handled correctly. However, finding the right industrial properties in Colorado Springs requires more knowledge than simply what listings are available.
A hasty property purchase can be just as detrimental to a business as a good one can be helpful. Industrial properties come with complexities that reach far beyond the initial functionality and location of the building.
Looking for Colorado Springs Industrial Properties? Don’t miss these 5 Key Considerations
The following five considerations provide a solid basis for informed decisions when searching for industrial properties for sale in Colorado Springs.
While financing may not be a consideration for the actual property, it can be a defining aspect of a property search. If you require financing, there are a wide range of options available and many are on a case-by-case basis.
The following financing options are just a few of the loans available for commercial lending:
If you are utilizing bank financing, it is worthwhile to begin the financing process before beginning the search. At this point, a preliminary conversation with a local lender can help to clarify budget, timing, and other expectations.
Once a property is selected, a clearer picture will come into view regarding the specifics of the loan and the project. Many different factors are considered in a financing package that can completely change depending on the specifications of the property being sought, therefore it is a fluid conversation until a specific asset is identified and put under contract.
Accessibility and Location
Location factors for industrial properties differ from that of retail, as they have much more to do with the ease of access and nearby transportation infrastructure than foot traffic and visibility. Roadways to and from, general traffic flow, and proximity to railways and highways all play a role in the day-to-day operations of a successful business.
Analyze the operations’ traffic flow in relation to the property in question. Do large shipments arrive on semis with the need to back into a loading dock? Does that require that the truck and trailer use the majority of the street to angle properly into the bay? If the street is even moderately busy, this could cause traffic congestion and frustration for the drivers.
Are there future changes planned for the existing road infrastructure? How will that alter the company vehicles, vendors and clients entering and exiting the property?
Consider any nearby businesses or organizations that could cause bottlenecks in production at certain times of the day (i.e. schools, shift-based facilities, etc.)
On-site parking should also be considered based upon daily operational requirements. Is there ample parking for employees and clients? Are large unobstructed areas needed for heavy machinery and equipment turnarounds or parking?
City Planning Regulations
Municipalities split land use into zoning districts. These districts are governed by zoning ordinances that dictate the use and development standards for that particular property. The city of Colorado Springs has five primary zoning districts, with various subcategories in each one – residential, commercial, office, industrial and public facility zones.
A restaurant is generally not located in an industrial zoning district. A noisy manufacturing company cannot operate in a residential neighborhood, and so on.
Most business owners understand the need to consider properties that are already zoned for their particular use.
However, it’s also important to note if there are any future city plans that may affect the use and development for your property. For instance, future residential developments might limit zoning to light-industrial, which may pose a problem if operations fall under heavy-industrial zoning. While zoning is most often a case-by-case consideration, it’s still important to think about future developments that may affect your property.
The existing construction on the property is also important to consider. You may wish to obtain an official zoning sheet of the site through the city planning department to determine if building lines, coverage percentages and height specifications are all congruent with zoning regulations. Discrepancies in these areas can cause setbacks for closing or even difficulty selling down the road. Visit coloradosprings.gov for more information on zoning for industrial properties in Colorado Springs.
Flexibility for Improvements
Upon purchasing an industrial property in Colorado Springs, it’s likely some amount of property alterations will be necessary in order to fit the space to the business’s operations. But when comparing potential properties, take the time to consider the extent of buildout improvements.
If the first-choice location will require considerably higher costs to make operations work efficiently, the second choice may end up being the better option. Look at the ease with which you will be able to make the necessary improvements, keeping in mind the zoning regulations and building codes for that area.
An owner should also consider business growth goals for the next 5-10 years. Will the potential location still fit the company in 10 years when the projected growth goals are reached? While growth risk is a good problem to have, it’s still a problem that should be considered. You may wish to buy a facility slightly larger than what you need today to give yourself some room to grow.
Environmental concerns have become a critical consideration when purchasing an industrial property. Decades ago, environmentally conscious practices for eliminating waste and toxic runoff were non-existent. Buyers today, whether the responsible party or not, can get buried under heavy mitigation costs of hazardous substances that affected the property years before.
This doesn’t mean that all industrial properties with environmental risks should be avoided. Deed restrictions and covenants can be drawn to allow some contamination to remain if low-risk exposure activities constitute the main use of the property.
But it’s important to understand the full picture of the environmental risks associated with the subject property before purchasing. In some cases, unaware buyers have been hit with hundreds of thousands of dollars worth of cleanup and risk mitigation before being permitted to operate on the property.
An experienced commercial real estate broker will know the potential environmental risks associated with industrial properties in Colorado Springs and can help make an informed decision from the onset.
A Phase I ESA (Environmental Site Assessment) is sometimes recommended during the site selection process to determine what issues may arise upon purchasing. If the Phase I ESA shows presence of potential contaminants, a Phase II ESA will be required for more in-depth assessment.
Find the Right Industrial Space for Your Business
All of these factors work together to provide a strategic snapshot of both the economical and practical viability of the properties in question.
For over 30 years, Peak Commercial Properties has been helping business owners find industrial properties in Colorado Springs that ideally suit their specifications. If you’d like more information about your property search or help sifting through these important factors, please call us at 719.227.9987.