Buying 7000 square foot retail space, but having a 30,000 square foot available for same price, same area.
Hi guys, it’s me again. 
To keep it short, our business needs a 7000 square foot retail space and verbally agreed to buy one that size. 
But recently we also negotiated with another seller selling 30,000 square foot retail space and it came down to being the same price range. 
7000 square foot: $580,000
30,000 square foot:$585,000

I’m not sure which one should I go for. 
7000 square foot is all we need, but can get a 30,000 for the same money. 
I’m also concerned with the added expense we are going to have with the bigger space (higher property tax, utility and more employee)

I’m not sure if I should buy the bigger one and divide some smaller space to rent out. (Not sure if city allows)
The bigger one is well maintained by big brand retail chain.

Any advise would be greatly appreciated.
[{"id": "hp8pvxf", "text": "Go big or go home", "replies": [], "depth": 1}, {"id": "hp8q4nf", "text": "You know you'll need a larger space later on. \n\nBuy the larger one of the inspection is good. Divide it up, either half or 1/3, and rent it out. \n\nAssuming the company has the funds for that.", "replies": [{"id": "hp8qm8l", "text": "I\u2019m not sure the City will allow me to divide and rent. It\u2019s a former Shopko space.", "replies": [{"id": "hp8rhss", "text": "They should be able to answer that for you.....I'd ask before making any decision.\n\nI'd also think about why the price is so high on the smaller space, or why the larger space is so cheap.  What other differences are there?", "replies": [{"id": "hp8sc7g", "text": "Because it\u2019s is a small town with no comparable. I would say the small one is fairly priced. It\u2019s just the big one is considered a heavy asset that the seller is trying to get rid of.", "replies": [{"id": "hp8xezm", "text": "in that case I'd be inclined to go big for sure, assuming you can make the numbers work for the added costs", "replies": [], "depth": 5}, {"id": "hp909g8", "text": "Which one will give you better foot traffic and visibility?", "replies": [{"id": "hp9htxh", "text": "Same area, but the big one actually gets more traffic\u2026", "replies": [{"id": "hpalwgs", "text": "You will 100000000% be able to demise the space for other users. \n\nKeep in mind you will be responsible for splitting utilities and demising walls. \n\nTalk to the broker / seller of the shopko box and see what other interest they had on the box. \n\nYou may be able to pursue a couple of deals out of the gate.", "replies": [], "depth": 7}, {"id": "hpazcmx", "text": "I would go with the larger and split it up if you could afford to divide it up for sure then.\n\nMore traffic, more revenue from renting it out, less cost per sq ft. Sounds like a good deal as long as the physical building is comparable in quality (roof isnt going to need replaced right away, rotton plumbing lines etc", "replies": [], "depth": 7}], "depth": 6}], "depth": 5}, {"id": "hp920tj", "text": "In that case if you can subdivide sounds like you'd be getting a good deal.", "replies": [], "depth": 5}], "depth": 4}], "depth": 3}, {"id": "hp8s184", "text": "It's being done all the time. Old Kmarts and Shopkos split up into few spaces.", "replies": [{"id": "hp8tsfz", "text": "That usually isn't an issue", "replies": [], "depth": 4}], "depth": 3}, {"id": "hpagxqj", "text": "If you produce more tax revenue by dividing, the city will be quite happy with more, not fewer tenants.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "hp8ts71", "text": "I\u2019ve commented on this before.  You need to think more about your business more then than about real estate investment.  \n\nBuy what makes more sense for your business.   The rest is gravy.", "replies": [{"id": "hp9uu3p", "text": "This. User purchase is totally different calculus than investment purchase.", "replies": [], "depth": 2}], "depth": 1}, {"id": "hp92whi", "text": "Location, location, location.\n\nThat should be your deciding factor.", "replies": [{"id": "hp9a45v", "text": "Not enough people said this. Location is key.", "replies": [], "depth": 2}, {"id": "hp9hxgq", "text": "Location, same location. \nThe big one actually is located in a more traffic location.", "replies": [], "depth": 2}, {"id": "hpb5zyz", "text": "This.", "replies": [], "depth": 2}], "depth": 1}, {"id": "hp9jev9", "text": "I've always been of this mindset:  I want a slice of pie, so I buy a whole pie knowing I can probably get a few slices for free if I sell off the rest of the pie.", "replies": [{"id": "hpah6i5", "text": "This.\n\nI've *never* lost money selling slices.", "replies": [], "depth": 2}], "depth": 1}, {"id": "hp9qt9o", "text": "I would go with 30,000 sq feet and look to lease out the remaining available space", "replies": [{"id": "hpa981l", "text": "This is the way.  You can always subdivide it later and make 1200sqft suites for others to rent out.", "replies": [{"id": "hpba4jd", "text": "No, you really can\u2019t. \n\nShopko boxes have too much depth. \n\nNo landlord is going to demise that because you would be left with nothing but useless space in the back.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "hpa95vh", "text": "Property tax would be the same right?  About same purchase price so they shouldn\u2019t be a factor", "replies": [{"id": "hpb1zuq", "text": "the big one's tax is almost double the small one.", "replies": [], "depth": 2}, {"id": "hpbakfp", "text": "Why would you assume property taxes would be the same for a 7K v 30K SF box? \n\nAfter reading a few of your comments, I\u2019m starting to think you shouldn\u2019t be giving advice on commercial RE.", "replies": [], "depth": 2}], "depth": 1}, {"id": "hpah209", "text": "Without seeing the structures, it's not easy to make a call but...all things being equal, more is often better.\n\nThere will be *tremendous* added costs but, could be worth it.\n\nGood demising walls don't come cheap (especially 28 foot tall ones) but....like divorce...they're worth the money :)", "replies": [], "depth": 1}, {"id": "hpb6xq8", "text": "Not knowing anything about the buildings, if a property is being offered as an opportunistic buy and is in distress, you have to answer the fundamental questions about why. Don't want to make the same mistakes and fall into the same traps. Especially with retail.\n\nArtificialStuff mentioned location..an example might be seeing a failed restaurant at a certain location but afterward, restaurants keep popping up in the same space. Perhaps because it's offered cheaply or because the equipment or the buildout comes with the lease.", "replies": [], "depth": 1}, {"id": "hpb7k0v", "text": "Functional obsolescence. Is the larger building too big for modern operations? Is the structure usable if it has to be automated? There are reasons for the price and until you answer that question don't buy either.", "replies": [], "depth": 1}, {"id": "hr893q1", "text": "What condition are the spaces in? Ensure that the 30k sqft space doesn\u2019t need $2M of rehab.", "replies": [{"id": "hrgp30s", "text": "Thanks! Great point. What else should I look for besides roof and plumbing pipes?", "replies": [{"id": "hritscq", "text": "I\u2019d hire a commercial real estate inspector. Also, depends on the general condition, is it ready to go or does it need rehab? Your city might require seismic or Ada or other updates. I have a building (for example) that needed a full gut rehab and a bunch of work done for $50-100/sqft to get to a warm shell. And that was on top of the purchase price.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}]