There is no such thing as starting too early when it comes to putting the building blocks together for your new business. As a commercial general contractor, we find that the earlier we have the opportunity to partner up with our clients, the better. 100% of the time. Because we get involved so early in a pre-construction capacity we are often there to guide our clients to find the best commercial space for their business. One common question that can come up is “What is better for my business? An older building or a commercial space in a new build?”
There are many pros and cons to each, and many factors in each unique scenario that a business owner should consider before signing on the dotted line. Today we’re going to examine the potential benefits and negatives between signing a lease in a new building vs. that in an old building to help you find the best commercial space for your business.
Commercial Spaces in Old Buildings
Some of Vancouver’s coolest neighbourhoods are characterized by beautiful old buildings. In addition to their heritage appeal, there are also a number of benefits with taking over an older or existing space. As you are inheriting what was left for you it is also important to review any potential risks.
Pros:
- Permit: Building permits can take months to process in Vancouver. If you are able to purchase an existing business that already has a lease and do minor “fixture renovations”, there is a chance you could get utilize that for your needs without having to take out a full building permit. Depending on the scope of your change you could also potentially try to get a field review permit which is must faster for the city to process than a full building permit.
- Existing infrastructure: Finding a unit that was already operating in a similar capacity to your intended use may mean that it is already set up with the fixtures you need. This can include the plumbing, electrical, and mechanical. If you can re-use this infrastructure then that can save you a lot of money during your build out.
Cons:
- Service upgrades: Depending on the age and state of the building, it may be determined that the building needs to upgrade much of its existing services. In which case, you may find yourself on the hook for upgrading them – both in terms of time and cost. This can be anything from the building’s electrical power, water service, or storm and sanitary drainage.
- Hazardous materials: In the unit has not been improved since the 90’s then there may be asbestos or other potentially hazardous materials in the walls or ducting. It is recommended that you always test before any demolition takes place. If anything is found you will need to allot time and budget for abatement to occur prior to construction.
- Building code: If renovations have happened in the past and you’re hoping to repurpose any of it, there is always a risk that the previous trade work was not up to current building code. In which case, you will be doing it again.
Commercial Spaces in New Buildings
Vancouver’s development is booming right now. With those new towers come gleaming new ground floor commercial units. At first glance they may be a bit on the pricey side compared to the monthly rent of an older building, but upon closer examination there is definitely something to consider with them.
Pro’s:
- Fixture and allowances: When looking at these spaces you are often working directly with the developer, so the landlord has a bit more to offer the new tenant in terms of the fixturing period and tenant improvement allowance.
- What you see is what you get: You know exactly what you are getting with the space and what you are starting out with.
- Pre-Construction Planning: Signing a lease prior to construction of the building can allow you to incorporate your needs into the building construction. So your plumbing, HVAC, and electrical panel locations can all be determined and planned for before the concrete is even poured. This can be both a time and cost saver.
Cons:
- Layout and coring: You’ll want to ensure the layout you want can actually work with the construction of the site from a drainage standpoint. A situation we’ve come across in the past is that the slab bands are overtop of electrical rooms. This can make coring holes for new drainage and layout really difficult.
- Kitchen ventilation: Ventilation for your kitchen exhaust can sometimes be challenging and expensive. It is incredibly important to know your exhaust plan and have this reviewed and approved prior to fully executing your lease.
- Base building warranty: Sometimes you are a bit handcuffed with being required to use the sub-trades who did the development in order to maintain their warranties. In many cases this won’t be an issue, but if you have trusted trades or if you’re working against specific timelines and schedules, this could be a frustration
Find the Best Commercial Space for Your Business
There is a lot to consider when you’re opening a new business. Our hope is that the above points will help you navigate the early days when looking to lock in your space, so you can hopefully avoid any pitfalls (or money pits) and ultimately find the best commercial space for your new business.
Here are some general tips we always recommend:
- Have a good realtor who is familiar with the ongoing rate for tenant improvement allowance and fixturing periods.
- Choose a space that is already zoned for what your business use is. Choosing something that needs to be rezoned will not only extend your permit process but there is also the risk that it will not even get approved.
- Do your due diligence and schedule a walk through with the appropriate building professionals and a general contractor. Beginning your work with these teams as early as possible can help flag any potential issues, will allow your team to budget and plan as best as possible, and can ensure your vision is executed as you envision it. It’s never to early to contact your general contractor for pre-construction services.