​Sold on buying commercial real estate?

Resources 9 Uncategorized 9 ​Sold on buying commercial real estate?
Perhaps after years of hard work and dedication, your small business has grown, and you find yourself ready to level up. Purchasing commercial real estate may seem the logical next step, and most often is for a growing business; however, there are few considerations you should be aware of before you do.  

Residential real estate purchases are different from commercial real estate purchases. If you have bought a home or two and are endeavoring to purchase commercial real estate, you’ll soon find that purchasing commercial real estate requires more planning, research and can take longer to close.  

An experienced commercial real estate attorney and broker can prove invaluable when providing the commercial documentation lenders require.  Lenders want to know your business profits can pay for the commercial loan – and that future positive cash flow will not be interrupted.

What makes a piece of real estate commercial?  
Any property used to expand and support a business in incoming generating activity qualifies as commercial property. 

A few commercial real estate examples are office buildings, warehouses, retail shopping centers, manufacturing facilities, apartment communities, hotels, and land for commercial development. 

Most business owners start their business in a space that makes the most financial sense, including a home office, garage, or shop in their backyard, and only consider purchasing a commercial space after their business has expanded. However, purchasing commercial real estate has benefits beyond the additional space:

  • Equity in commercial real estate can rise due to inflation
  • Tax benefits of deprecation to offset income tax
  • Freedom to customize your office or warehouse space
  • Commercial tenants’ leases are longer than residential, providing 5+ year supplemental cash flow.  
  • Commerce tax breaks for elevating surrounding property values

Once you’ve decided that purchasing commercial real estate is the right move, it’s time to gather a team. Unless you are a commercial real estate agent turned attorney with a background in accounting familiar with negotiating real estate, leasing and contract law, and exposing liability, you will want to assemble a team proficient in these areas.  

A successful team might include a commercial real estate attorney, commercial broker, certified public accountant, insurance broker, and a commercial lender. Your CRE broker and the attorney will need to supply the following services and documents to a prospective lender:  

Commercial Real Estate Broker

  • Facilitates negotiations between you and the seller
  • Provides business plans including current tenant rent roll
  • Research costs associated with the commercial real estate, including current and future operating expenses
  • Finds previous appraisals and environmental studies
  • Helps secure a new appraisal(s) and environmental study

Commercial Real Estate Attorneys

  • Prepares your purchase agreements
  • Reviews environmental, zoning, and survey reports, as well as current licenses included with the purchase
  • Reviews lender’s commitment and terms letter outlining conditions, rates, and covenants.
  • Retains your “good faith” deposit
  • Explains closing documents before and at the time of closing
  • Ensures a clear title transfer of commercial property

In addition, a commercial real estate attorneys in Lake Charles, Louisiana can assist you with the following commercial activities:


Duties of commercial real estate lawyers, commercial real estate attorneys in Lake Charles Louisiana



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