Commercial Real Estate Leases - What Every CRE Investor Should Know Before Renting Out Their Property

 Posted on December 27, 2018 in Commercial Real Estate

With more investors breaking into the commercial real estate sector, demand for reliable and comprehensive information on the selling and leasing of property increases. Granted, the information that one finds on the internet must be carefully vetted, and investors are highly encouraged to run all decisions and potential changes by their attorney, as this can help avoid the risk of lawsuits and financial loss. However, with a better understanding of the potential pitfalls, landlords can be better prepared, which can allow them to better plan for their future. 

Being Prepared for the Challenges in Commercial Leasing 

The stakes and risk of financial loss are far greater for the commercial landlord and tenant. There are also some nuanced issues in the CRE market that can significantly alter the needs and concerns of an investor. For example, there are different asset classes in the CRE market, and the challenges tend to vary for each one. In other words, the owner of a low-income apartment will have different needs than a hotel or casino owner. 

Negotiating - whether it be during the purchase or sale of a property, or while trying to re-negotiate a lease or establish a new one - is a skill, in and of itself. Most investors are not negotiators, though some do seem to have an innate ability. In either case, the negotiation process should never be done alone. There are different types of leases, and you can never be certain that you are getting a fair deal until all aspects of the sale have been carefully weighed and considered. An experienced commercial real estate investor can help. 

The safety and security of potential patrons may also be an issue for certain investors (but not all). Restaurant investors will likely need to account for the risk of fires and premises liability. Investors who focus their time and energy on office buildings or parking garages may be less likely to face these same issues. Instead, they may need to worry about things like crime on the premises, or whether they could be held liable for the damage of someone’s property. 

Thankfully, you do not have to understand all the exact nuances of your asset class or investment type. In fact, it is highly recommended that you resist the urge to manage your portfolio alone. The most successful people in the world probably got to where they are because they had a skilled and educated support team - and while the members of your team may change over the years, depending on your needs and goals, the one person you should never go without is a seasoned real estate attorney. 

Contact Our Wheaton CRE Investment Lawyers

Whether you are just starting out in the CRE market or a seasoned veteran, Stock, Carlson & Asso. LLC is the firm to call for your legal real estate needs. Backed by over 40 years of knowledge and experience, our skilled DuPage County real estate lawyers can assist you with everything from performing your due diligence to successful commercial lease and purchase or sale agreements. Call 630-665-2500 to schedule your consultation today. 

Sources:

https://www.cnbc.com/2019/01/11/5-money-blunders-that-keep-you-from-getting-rich.html

https://www.forbes.com/sites/forbesrealestatecouncil/2018/12/11/how-to-prepare-commercial-real-estate-for-premises-liability/#86706b871248

https://www.bizjournals.com/birmingham/news/2018/06/01/expert-tips-for-negotiating-your-commercial-lease.html