A good portion of my practice involves commercial real estate work. Recently my clients are much more active in acquiring or selling commercial real estate. Here are a few tips I suggest all buyers and sellers of commercial property keep in mind:
1. Analyze existing leases. The month-to-month snapshot of rents paid in the past is notable, however, it is significantly more important to review the amount of time left on the existing leases. Be sure to get a copy of all the leases currently in place early in the transaction.
2. Trust your eyes and get an inspection. The numbers on paper may be great, but, you must take into account what you see when you visit a property. Look for signs of aging because that translates into near future cash expenditures. If you think you're seeing signs of aging, you probably are. Follow up with an aggressive, thorough inspector to find all the issues; inspectors are a great source for recommending remedies for those issues.
3. Get title work pulled early. If you are selling, have the title work pulled before listing the property to see if there are any surprises. If you are buying, ask for a title commitment early in the process to assess what, if any title issues exist.
4. Capture in writing what is being sold. Too often there is a verbal agreement for the acquisition of business interests or assets. Unfortunately, those verbal agreements do not get reduced to writing and the parties end up squabbling over details. Document everything!
Commercial property can be a great investment, particularly if you are careful along the way. Real estate agents can be useful in the process, but, a credible agent will not delve into matters outside of their expertise, such as those items above. Feel free to call me at any juncture of your journey into selling or buying commercial property for assistance in getting your deal closed.
The material contained herein is provided for informational purposes only and is not legal advice, nor is it a substitute for obtaining legal advice from an attorney. Each situation is unique, and you should not act or rely on any information contained herein without seeking the advice of an experienced attorney.