Over the past sixty years both the residential and commercial real estate markets have exploded all across the nation, especially in larger, more populous cities. Today, commercial real estate is big business, and purchasing commercial real estate is a huge investment that involves appraisers, commercial brokers, and of course real estate attorneys.
There are many different purposes for commercial real estate investments, whether they involve owning an apartment complex, a hotel, or a strip mall, these transactions are far more complex than residential purchases and sales. Since the real estate market expands and contracts every few years, the real estate market imposes a consistent dilemma for many of the smaller to mid-sized businesses. The questions often asked are, “Should I rent or should I purchase commercial property?"
Whether you are buying or selling commercial real estate, it can be difficult to accurately predict the real estate market in order to maximize your investment; however, the potential rewards for the investor can be substantial. Business buy instead of rent in order to gain control over the costs of overhead, much like one does with a residential property. In contrast, with leasing if your lease expires when the rental market is tight, you face paying higher rent. Of course, there are the other benefits of owning which include the investment benefits such as the property’s depreciation for tax purposes and for the asset protection in the long term. Each business looking to purchase commercial real estate property versus renting needs to weigh the potential benefits along with the risks involved.
One of the important factors to consider is the location. The area you choose can play a huge role on whether or not your investment was a good choice; this is especially the case if you are buying an apartment complex, a restaurant or some other form of retail business. For certain types of businesses location are everything.
Liquidity is an important issue to consider. A business may tie up their liquidity by buying property, and it may be difficult to move it if the market crashes. On the other hand, at least your business would have real estate to sell if they need cash to revive the business. The decision to purchase real estate comes down to what makes sense. If it’s the right time to buy, it may be cost-effective and profitable to purchase commercial real estate. You will need to take into account the cost benefits of buying versus renting, while factoring in tax benefits such as depreciation.
When looking for a property to buy, your biggest issue will be location. You want to be close to your employees, your vendors, and your suppliers. If you are operating a retail business, you will need to consider the amount of foot traffic as well as people driving by. With certain businesses, it’s important to have easy access to rail, highway and shipping lanes as well.
Once you find a property, it’s important to look at the condition of the property. Take into account how you will use the property, how much work it needs and whether or not there are any environmental or possible liability issues such as toxic waste, asbestos or lead paint.
You need to make sure that the zoning allows you to do what you want to do on the property. For example, if you have a manufacturing plant, you will need an industrial building and if you have a real estate company, you will need a commercial building. Keep in mind that in some cases there are limits on what you can do to a building; this is especially the case if the building is located in a historical area. It’s also a good idea to look at future opportunities to lease out any extra space that you might have.
Whether you are a buyer or a seller of a commercial real estate property, it’s important to enlist the services of a good attorney. For the majority of businesses, selling or purchasing assets is a key element in the success of the business when it comes to promoting solvency and future growth. Therefore, it’s absolutely vital that you ensure that your transaction goes as smoothly as possible. By securing an attorney to oversee your transaction, you are insulating your business from potential liabilities. Both buyers and sellers should have an attorney, and their attorney’s diligence will prove critical to maximizing the long-term effects of the sale.
As a business owner, there is little room for error when it comes to real estate investments. Commercial real estate transactions are far more involved and complex than residential real estate transactions. They frequently involve commercial brokers, appraisers, environmental regulations, financing and sometimes liens. However complicated they may be, often times the benefits far outweigh the risks involved. When it comes to such a large investment for your business, you can’t put a price on a good commercial real estate attorney and the value and reassurance they can bring to the deal.
Commercial real estate law governs buildings and properties that are used for business purposes. Such businesses include apartment complexes, office buildings, strip malls or shopping centers, vacant property intended for development etc. Whether you are buying or selling, it’s essential that you hire a commercial real estate lawyer to protect your best interests.
Real Estate Attorney