Whether expanding the existing business or starting a brand-new organization, it will likely be necessary to purchase commercial real estate. These transactions often represent a significant portion of your available time and money, so it is crucial to take the time necessary to avoid any mishaps that could mean cascading challenges in the future.
Even though every real estate transaction is unique, there are certain common factors that every buyer must remember, including:
- Negotiation is key: The real estate process can be exhilarating, and it is not uncommon for buyers to get swept up in the excitement. It is wise to take your time and review the paperwork to identify any negotiating room. Whether it is a buy/sell agreement or a lease agreement, it might be possible to negotiate a lower price, different provisions or better terms. Buyers who get caught up in the rush to complete the transaction will likely overpay for their property.
- Fully research the site: In many ways, the adage of location, location, location is true for both residential and commercial real estate transactions. When exploring a commercial real estate location, it is wise to perform as much research as possible. Will there be long-term construction projects in close proximity? Are there known environmental issues that must be addressed? Is there a history of insect or rodent infestation in the area? Prospective owners can interview existing owners to gain their insight on the property and community challenges.
- Thoroughly review any lease paperwork: Whether purchasing the property or leasing commercial buildings, a careful document review is necessary. Many organizations would rather lease property than own it – removing certain financial liabilities and giving them a measure of freedom of movement. Unfortunately, a lease agreement can be a dense, complex document written to favor the property owner. It is wise to fully explore the agreement to see what benefits are given to the landlord and what limitations await the tenant.
Whether it is your first commercial real estate transaction or your fifth, it is wise to take the time necessary to carefully explore the documents, the location’s history and any future concerns. Do not hesitate to seek the guidance of an experienced attorney to provide insight and answer your questions.