How can I protect by business in a commercial real estate deal?
As the broader economy continues to recover, the commercial real estate market in the Capital Region offers investors a number of opportunities. At the same time, there are inherent risks associated with the purchase and sale of commercial property. Let's take a look at some of the key issues that need to be navigated in order to achieve successful outcomes.
The overarching factor involved in these transactions is the size of the investment, and determining an accurate valuation of a property requires due diligence. Obviously, this hinges on the type of property you are looking to buy, whether an office building, apartment complex, shopping mall and the like.
The value of these properties often depends on their size, age and condition, current and future income streams, as well as the value of similar properties in the market.
Moreover, while investing in commercial real estate can be lucrative, there is usually a lot of money at stake. For this reason, it is important to ensure you have adequate capital reserves to make the necessary financing payments. One problem that can make or break a deal is vacancies that can limit your rental income, making it difficult to meet your commercial mortgage and property tax obligations.
Issues with the Property
It is also critical to conduct a thorough investigation to uncover potential issues associated with the property, such as land use and zoning requirements, environmental considerations, existing liens and other potential title defects, easements and/or encroachments. It is crucial to work with an experienced real estate attorney to protect your interests. In particular, an attorney can help ensure that you are not assuming liability for any legal violations, such as existing environmental hazards. By conducting due diligence, you can determine whether such liabilities exist before the deal closes and avoid the costs of eliminating any hazards and potential lawsuits.
The Bottom Line
In the end, commercial real estate transactions are far more complicated than residential deals, and there are a wide range of issues that must be considered. For this reason, if you are looking to buy or sell commercial property in the Capital Region, you should contact the law offices of Ianniello Andersen, P.C. We serve clients in the Albany, Clifton Park, Glens Falls, Saratoga Springs, Troy and the entire Northeastern New York area.