Factors to Consider When Choosing a Commercial Real Estate Location

 In Industry Insights and Trends

If you are considering venturing into the world of real estate, then you should consider all the aspects that come with it. One of them is location. Not just location, but a prime one. Choosing a prime location can be the difference between a profitable venture and missed opportunities. That said, let’s dive in and discover the key factors to consider when selecting a commercial real estate location.


Do not overlook the local rental market economics. Is the location in high demand? For example, is there public transportation that enhances the value of the property? Or colleges where housing is in high demand? If yes, this location can net higher rents when near the amenities. Plus, locating in a distant place only appeals to a select number of businesses or tenants, which may not see the desired ROI. Ones in high-demand areas have higher chances of yielding profits.


Knowing and understanding an area’s demographics provides insight into your property’s potential market. The income level, population size, age, and other local community characteristics will help you determine the area’s alignment with your target market.

For instance, if you are considering opening a discount store, a location with a low median income will work well for you. On the other hand, opening a high-end retail store will work best in a location with a high median income.


Prioritize a commercial real estate location that is economically feasible. However, that is not the only aspect to worry about. Consider the extra expenses surrounding the location besides the asking price and rent. These include economic incentives, minimum wage standards, utility upgrades, renovations, and taxes. Also, consider vehicle licensing and permit fees before deciding on your business location. Note that these costs vary from one area to another.

Surrounding Businesses

The type of business your potential neighbors can affect your decision on your commercial real estate location. For instance, if your business relies on foot traffic, you should locate in an area with high-end business. This will help you attract a better type of clientele.


Work in a location where there will be little or no rivalry with the surrounding businesses. Avoid locations with established businesses with high demand competing with you. If possible, choose a location where the surrounding businesses complement your own.

Choosing a commercial real estate location with low competition offers several significant benefits for your business. They include:

  • Increased market share: With fewer competitors vying for customers’ attention, you will have a higher chance of attracting and retaining a larger customer base.
  • Reduced pricing pressure: You will have more flexibility in setting prices without the pressure to engage in price wars. This allows for potentially higher profit margins and better control over pricing strategies.
  • Enhanced customer loyalty: With limited options available, your potential customers are more likely to develop strong brand loyalty.
  • Improved visibility and brand recognition: You have a better chance of standing out and gaining visibility in a less crowded location.
  • Favorable negotiation power: You will have more leverage when negotiating with your customers. This can lead to advantageous terms and improved business relationships.

Zoning and Regulations

Research the zoning and regulations regarding the property in the area. These laws affect the business type and if expansions and renovations are allowed. You cannot open a commercial business in a property zoned for residential use. It is also important to check out property codes since they may affect your expenses when renovating or expanding your business in future.

Buildings’ Condition

You need to consider the type of building for your business. Even with a prime location, the building should look attractive on the outside and with little or no maintenance issues.

Work with Southeast Ventures for Nashville Commercial Real Estate

Considering these factors will help you better decide on your commercial real estate location. At Southeast Ventures, we understand the complexities of prime locations and can guide you towards lucrative opportunities.

Contact us today to learn more with our experts.