What is Commercial Real Estate Law?
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This is the area of the law allocating with real property: permanent property such as land, buildings, and fixtures, but most importantly the property produces income. This includes properties such as offices, retail space, restaurants, malls, factories, medical office, industrial, and flex / research and development space. Both federal and state laws administer commercial real estate transactions. For legal purposes commercial real estate can contain anything dealing with real property in a business setting. This could be selling real property with or without a business involved, selling an apartment complex, or renting out executive office space.
Lease or Buy? The Pros and Cons of Commercial Real Estate
As the old business saying goes: location, location, location. A business often depends on the location of its commercial real estate to continue and grow. Sellers use their location to draw in as many clients as possible, while other businesses may be more concerned about lease rates, square footage, and suitable access for their employees.
Factors whether to Buy or Lease Commercial Real Estate:
• Access to cash at the beginning of the business
• The type of business you wish to engage in whether the company has established credit
Types of Commercial Leases
There are plenty of different types of commercial leases a business owner may enter into with a landlord. Some examples of commercial leases are:
- Fixed leases: A fixed lease is much like a typical residential lease. In a fixed lease, the parties agree to a specific amount of rent for a fixed period of time.
- Step leases: In a step lease, the parties agree to increase the rent a certain amount yearly. The step lease is meant to acknowledge the potential cost increases the landlord may incur.
- Gross leases: In a gross lease, the tenant will pay a set periodic (or fixed term) rent to the landlord. The landlord in a gross lease will agree to pay for some or all of the operating costs of the business.
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