Naperville, IL 60563
Call Us Today for an Initial Consultation
630-778-3818
Recent Blog Posts
Due Diligence Facts Every CRE Investor Should Know
Due diligence is a critical step in the acquisition of a property, especially for those dealing in commercial real estate. Done effectively, the process can protect you from lengthy project delays, zoning issues, and other negative consequences. In contrast, failures in your due diligence process may lead to extreme financial loss and an overall poor return on investment. Learn how to avoid mistakes and oversights in your due diligence with these crucial facts.
You Need to Spend Time at the Property
Far too often, investors rely on the “experts” to handle the due diligence process. They hire an inspector but do not attend the inspection, contact someone to value the property but are not present during the valuation process, and rely on reports to tell them whether the building is up to code. Sadly, this is a massive mistake.
Spending time at your property not only allows you to learn about it, it ensures you fully understand any potential issues. Rather than simply reading a report, you can talk to the fire martial or inspector to get an in-depth understanding of the issues (and the potential cost to fix). Simply being in the space can help you determine whether your goals and intent for it are realistic. So, if there is even just one thing that you change about how you conduct your due diligence, let it be a massive increase in the amount of time you spend at your properties.
How Can Zoning Affect an Illinois Renovation or Redevelopment?
In the business of commercial real estate, it can often be beneficial to purchase a property that has already been developed, rather than starting a new development project from scratch. Perhaps a developed property is located in the perfect place for your purposes, and you may even find that you can adapt existing structures to your needs. However, chances are that you will need to make some changes, either through a renovation or a complete redevelopment, and if so, you should be aware of zoning regulations that may impact your project.
Zoning Regulations in an Illinois Commercial Real Estate Renovation
You may find that you can adapt a new property to meet your needs by renovating structures that have already been built. A renovation may help you save time that you would need to spend on demolition, construction, and rezoning, but in most cases, you will still need to pay attention to zoning regulations in the local municipality that affect the development. For example, you may need to ensure that your renovation complies with local health, safety, and energy efficiency standards. You will also likely need to ensure that the property is authorized for use as the kind of business that will be operated there.
Which Type of Commercial Lease Is Right For My Business?
Whether you are the owner of a commercial real estate property, or you are looking to rent a space for your business, reaching an agreement on a commercial lease is a crucial part of your operation. There are a variety of lease structures available depending on the property's use and the preferences of both the landlord and tenant. The complexities of these different kinds of commercial leases can be challenging to interpret, but an experienced real estate attorney can help you determine the best options and negotiate a lease that addresses your needs.
Types of Commercial Leases in Illinois
Commercial leases vary based on the rights, responsibilities, and obligations of both the landlord and the tenant. Some of the most common types of commercial leases include:
What Protections Does Title Insurance Give Commercial Real Estate Investors?
Title insurance is part of virtually every commercial and residential real estate transaction. Usually, it is the lender that insists on the formalities of title insurance. However, title insurance can give commercial real estate investors a great of protection, even if nothing ever goes wrong.
What Title Insurance Does
Before a title insurance policy is issued, the title company does a thorough examination of the title history of a property. This will include not just any sales, but also any liens on the property. Title insurance protects policyholders from any defects that are not discovered during the title search. If a defect later arises, title insurance covers the cost of defending claims from rival titleholders and pays out damages should those rivals prevail in court.
The issuance of title insurance is a key part of the due diligence process. Commercial real estate investors are able to make sure the property is as the seller claims. Any problems with zoning, title, or liens are usually discovered during the title search. If any issues arise, investors can either pull out of a deal without risking further resources or work with the seller to find satisfactory solutions.
Protecting Your Interests in Commercial Lease Agreement Disputes
Of all the real estate matters, those involving commercial lease agreement disputes are often the most complex. Governed by complicated contracts and esoteric laws, they could result in a significant financial loss for a business or landowner if handled incorrectly. Such disputes may even result in violations at a local, state, or federal level that could compromise future use of the property. If you are facing a commercial lease agreement issue, understand your rights, and how to best protect them.
Common Commercial Real Estate Agreement Issues
Though real estate agreement disputes come in a wide variety of forms and types, they typically involve two vested parties: the tenant (or business owner) and the landlord (landowner). Some issues stem from a breach of contract. Others are due to improper land use or development. Still others may relate to property damage or failure to maintain the property as outlined in the contract. However, not all disputes are between the landlord and the tenant.
Renting Commercial Property - What Every Business Owner Should Know About Commercial Property Leases
Most Americans have rented a home, apartment, or condominium at some point in their lives, but only a small fraction rent commercial spaces for their businesses. As such, many renters are unaware of the differences between commercial and residential leases. Yet, as the following explains, these differences can catch you off guard, especially if the market turns or your business fails. Learn how to mitigate against such situations, and discover how an attorney can help protect you with your commercial lease agreement issues.
Commercial Leases versus Residential Leases
Despite any misconceptions that commercial renters may have about commercial leases, they are significantly different than residential leases. In fact, the agreement itself is not standard. Instead, it reflects each landlord's needs and preferences. Second, they are often longer and can cost you a great deal more money if you breach the contract. Flexibility and negotiability are also lower in commercial leases, and there are fewer consumer protections. All these aspects, when combined, make for a potentially catastrophic situation for commercial renters.
Real Estate Investment: Potential Challenges and Benefits of Short-Term Rental
The short-term rental industry has grown exponentially in demand, and savvy real estate investors (along with several others) are looking for a way to profit from it. Part of the reason for this can be traced back to the projected growth of this maturing industry. Still, there are some challenges for investors who are looking to break into this young but growing market. Learn more about these challenges in the following sections, and discover how our seasoned real estate lawyers can help you break into this thriving real estate market.
Challenges in the Short-Term Rental Industry
Experts say that the short-term rental industry is not only here to stay, it is going to change the way that people look at real estate. Unfortunately, the market is still experiencing some growing pains; lawsuits - mostly from agencies like the National Apartment Association and the National Multifamly Housing Council - are cropping up all over the country. Yet, despite what some people may think, these agencies are not necessarily against short-term rentals. Instead, they simply want a cut of the profits for a property that they rightfully own, but it appears they are not certain of how to get it. So they are taking the matter to court, hoping to gain some traction there.
Evicting a Commercial Tenant for Rent Delinquency
Business owners of all types can experience a drop in sales and fall behind on their bills. Unfortunately, when this happens, it can leave the landlord in a difficult predicament. On the one hand, commercial property owners know it is usually easier to keep a current tenant than it is to find a new one, so they may be willing to wait out a slow season for a delinquent commercial tenant.
On the other hand, the lack of payment can cut into the investor's profits, perhaps to the point that it places them at risk for financial problems themselves. As such, it is important that investors not only understand the eviction process for a commercial tenant who is behind on their rent, but that they also carefully consider their options before moving forward with the process.
Should You Evict Your Commercial Tenant?
Small-Scale Investors to Be Denied a Break Under New Tax Law
The Tax Cut and Jobs Act went into full effect at the start of 2019. Sadly, this new law will fall short on delivering some of its promises. A prime example is the small business tax benefit, which was supposed to allow taxpayers who made less than $157,500 ($315,000 for a married couple) to deduct 20 percent of a pass-through business’ income from their overall taxable income. Yet, in what many call a “shocking” and “counterintuitive” move, the Treasury announced that taxpayers who use triple net leases will be blocked from claiming the deduction.
What might all this mean for your investment portfolio, and what can our seasoned Naperville real estate lawyers do to help? The following information explains further.
Triple Net Leases - The “Gold Standard” in Commercial Real Estate
For better or worse, triple net leases are considered the “gold standard” in commercial real estate - and for good reason. In addition to requiring the tenant to pay the landlord for their rent and utilities, they must also submit payment for any outstanding costs, such as those related to maintenance, insurance, landscaping, or property taxes. In short, triple net leases leave for the landlord to manage or check up on while renting out their property. They simply use the money to ensure that all costs related to the building are covered; the rest is considered their return.
What CRE Investors Should Know Before Adding Restaurant Property to Their Real Estate Portfolios
With more restaurants offering delivery services to their customers, and the popularity of food delivery services rising, the interest in the restaurant investment sector is growing at an unprecedented rate. Unfortunately, far too many investors dive into this industry without fully understanding its risks and nuances. As a result, they increase their risk of significant financial loss. Be proactive and avoid such a fate with help from the following information.
A Closer Look at the Restaurant Investment Boom
From a distance, it might appear that the entire restaurant industry is booming. However, upon closer inspection, current trends indicate that growth is confined mostly to Class A properties. All other properties are seeing little (if any) growth - and in many areas, closure rates for Class B and C restaurants are increasing. As such, investors wishing to break into the restaurant sector are encouraged to focus their sights on high-end properties. Just keep in mind that, because of the current boom, competition in the Class A restaurant sector is exceptionally high.
1730 Park Street, Suite 117, Naperville, IL 60563
630-778-3818
