Globalization means companies are poised to take hold of markets far from home easier than ever before. However, there are a series of questions to be asked before making any final decisions.
We’ll assume the basics like whether the price is fair for the area, have already been asked and answered; businesses building new operations in new places are no beginners. Instead, this post focuses on the questions business leaders may not be asking themselves when it comes to buying commercial property in a strange place, due to time constraints and old fashioned absent-mindedness:
Are there local incentives?
Certain places in the world have benefits for businesses operating there. For instance, the Houston energy market is deregulated, allowing companies there to shop around to find the best electricity rates. In fact, the whole state of Texas is open to a variety of electricity providers. This is an incentive for businesses that anticipate high energy usage. Other incentives include the available talent present in a given region or local market.
Are there tax incentives?
Provinces, states, counties, and cities are all going to ultimately have their own specific take on taxing businesses. Before buying property in a strange part of the world, it’s imperative to research the projected tax burden your enterprise will carry. Failure to do so could result in unexpected costs. The flip side of this coin is that many local governments provide tax incentives for businesses in some form or another, giving companies a chance to gain a foothold.
How is the economy?
Cities which attempt to attract businesses to establish a presence within their borders tend to be the – how do we say this politely – the League Two to the Premier League metropolises of the world. They’re usually one-time economic powerhouses fallen on hard times. The benefits are usually bargain rate real estate (hence your interest) but if regional sales are a core expectation of the expansion, a depressed local economy is bad news.
How capable – or corrupt – is the local government?
A city or county is only as strong as its elected officials. Mediocrity is in no short supply across the world’s many local governments but responsibly managed municipalities exist. Businesses looking to start operations somewhere new are going to want to avoid falling for a bait and switch situation generated by smooth talkers in the public sector. The cure consists of two words: due diligence.
Will staff be happy?
The property chosen for beginning an expansion into new markets will be filled with employees. Whether a staff of seven or 700, the environment ought to encourage productivity. Windows, plants, and odor control are just some of the many factors going into the way a particular commercial property can inspire workers rather than inhibit their creativity, focus, and happiness.
Will staff be safe?
The part of town the commercial property is in will have a crime rate. Generally speaking, the lower the price for the real estate, the higher the likelihood of illegal activities happening nearby on a daily basis. While a secure garage can help keep staff safe in cities where automobiles are the predominant mode of transportation, it doesn’t cover all the bases. Check the local crime rate before making the final decision on a property in a strange city. If it’s on the iffy side of the spectrum, make a point to educate staff on staying safe when arriving and departing the office.
Businesses with the ability to take advantage of the global scope of expansion possibilities are unlike to be clueless about value. However, more than the price per square footage goes into buying business property, especially in a strange place. Ask the right questions, and more importantly, get the answers.