Commercial real estate space, warehouse office space.

The Many Aspects of Commercial Real Estate Transactions

WHAT IS COMMERCIAL REAL ESTATE?

While residential real estate is property that people use to live in, such as single or multi-family homes, commercial real estate is property that people use as a business or as an investment. There are different types of commercial property, and they include:

  • Office space
  • Retail space
  • Multi-unit buildings of greater than four units
  • Mixed-use buildings, such as a building with both a storefront and residential space
  • Industrial buildings

RESIDENTIAL LEASE V. COMMERCIAL LEASE

  • Rate: Commercial real estate lease rates are typically based on the value of the square footage of the property, whereas real estate property rates are based on monthly or annual calculations.
  • Length: The length of commercial real estate leases range from 1 to 10 years, with an option to renew, while residential leases are usually 1 year leases.
  • Type: Each type of commercial lease comes with different tenant and landlord responsibilities. 
    • Single-net lease—tenant is responsible for paying property taxes.
    • Double-net lease—tenant is responsible for paying property taxes and insurance.
    • Triple-net lease—tenant is responsible for paying property taxes, insurance, and maintenance.
    • Gross lease—tenant is only responsible for paying the rent, and the landlord is responsible for the remaining fees.

Whether leasing, buying, or selling commercial property, the transaction can seem complex. There are many documents needed to finalize a commercial deal, and there are various city and zoning regulations that need to be observed. However, a good attorney helps you understand these differences, makes recommendations, and ensures that your transaction processes smoothly. 

STEPS INVOLVED IN A COMMERCIAL REAL ESTATE TRANSACTION

In any Commercial Real Estate transaction, Tannehill Law can help with the following steps:

  • Prepare Deeds
  • Draft and review leases or purchase and sale agreements
  • Negotiate leases and amendments 
  • Formation of Real Estate holding companies

Author: Yassmin Koudmani

Co-Author: Melissa Tannehill