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Recent Blog Posts
Development and Annexation Agreements in Illinois
Real estate developers in Illinois need to be aware of the potential implications of entering into development and annexation agreements with local municipalities. These agreements can significantly impact the financial viability of a project, as well as the potential risks and rewards. Understanding these agreements' essential terms and conditions is critical for ensuring a successful project. Without a development or annexation agreement, a developer risks having their project halted or modified, leading to significant delays and increased costs. To navigate this process, contact an experienced lawyer for essential guidance.
What Is a Development Agreement?
A development agreement is a contract between a developer and a municipality that sets forth the terms and conditions under which the developer may proceed with their project. The agreement will specify the type of development that is allowed, the number of units that can be built, the density of the development, the height of the buildings, the setbacks from property lines, and other zoning regulations. The agreement will also identify any particular conditions that apply to the project, such as environmental restrictions.
Common Pitfalls That Can Affect Commercial Leases
Most businesses need space where they can operate, requiring them to lease property from a landlord. Commercial lease agreements can be complicated, and tenants will need to be aware of how the terms of a lease will affect their ability to conduct business, the expenses they will be required to pay, and other unexpected issues that may arise. By understanding some of the lease-related pitfalls that commercial tenants commonly encounter, a business owner can avoid these problems and ensure that they will be able to conduct business successfully.
Commercial Leasing Issues That May Affect Tenants
Business owners will need to fully understand the terms of a commercial lease. Some issues that should be addressed when negotiating a lease agreement include:
- Common area maintenance (CAM) - A lease may require tenants to contribute toward operating expenses or other costs related to common areas on a property. This may result in additional rent being charged on top of standard rent payments. Tenants should be aware of the types of CAM expenses they may be required to pay, including capital improvements or expenses related to other tenant suites that are not exclusively common areas. In some cases, a lease may place a cap on operating expenses, or it may limit the types of expenses a tenant will be required to pay.
What Forms of Due Diligence Need to Be Performed in the Purchase of Commercial Real Estate?
Investments in commercial real estate can be very lucrative but can also be very costly if mistakes are made. There are a variety of concerns that will need to be addressed when purchasing commercial property. This article is brief summary of some of the main due diligence items but is not exhaustive. If a buyer will be assuming ownership of property that tenants currently occupy, they will need to be prepared to assume existing leases and understand any other contracts that are in place that will survive the Closing such as service contracts, Declarations of Restrictions and Easements, and other agreements. To ensure that the Due Diligence Process is done correctly and critical items are not missed by the Purchaser, it is crucial to work with an attorney who can help perform due diligence or guide the client in what matters of due diligence are most important during the due diligence period under the subject Purchase Contract in a transaction.
Commercial Lease Modifications for Tenants Affected by COVID-19
Since the onset of the COVID-19 pandemic in 2020, businesses in Illinois and throughout the United States have encountered financial difficulties. As the country is beginning to return to normalcy, some businesses have been able to resume their regular activities and continue operating successfully. However, many businesses are still struggling as they determine how to respond to the loss of revenue that occurred due to the pandemic. These issues have affected many commercial leases, and both landlords and tenants may need to determine how to address situations where a business has been unable to pay rent on a short-term or long-term basis.
Negotiating Lease Modifications for Commercial Landlords and Tenants
As commercial tenants have encountered financial struggles, this has put many landlords in a difficult position. While some landlords many have pursued lease enforcement actions, others may have been hesitant to do so due to the difficulty of finding new tenants in the current marketplace. Rather than pursue evictions or take steps to terminate a lease, it may be beneficial for both parties to negotiate lease modifications that will allow a tenant to continue occupying a space as they attempt to address their ongoing financial issues.
How to Successfully Navigate Through the Zoning and Development Process For Existing or New Commercial Real Estate Development Projects
Real estate developers and investors will typically have multiple opportunities to pursue projects involving commercial real estate which may include retail, industrial, office and various mixed-use developments. A development project will typically involve the construction of on-site and off-site improvements, the construction of new buildings or structures, and a variety of other changes that will allow a property owner to generate revenue by leasing space to commercial tenants. However, when planning to purchase commercial property or begin a development project, owners and investors will need to understand how zoning laws will apply to them and their options for addressing any issues that may affect their ability to carry out their plans. Any mistakes with this process can be very costly and fatal to a project. The zoning and land use attorneys at Lindell & Tessitore P.C. have extensive experience in helping buyers and owners navigate through the zoning and development process, including, but not limited to, due diligence matters and in seeking to obtain all zoning and development entitlements needed for the zoning or development project.
What You Need to Know About Construction Defect Litigation
Few things are more frustrating than finding that your home or building was built with some type of defect. These defects may not be discovered for years down the road after any warranties have long expired. Sometimes even your commercial general liability (CGL) insurance will not help you recoup the costs to fix the construction defect.
Why Your Insurance May Not Cover You for Construction Defects
The way Illinois courts have interpreted CGL coverage issues differs significantly from many other states. Most CGL insurance policies state that coverage does not kick in until there has been an occurrence. Illinois courts have interpreted occurrence to exclude defects introduced during the construction process because those acts were intentional and not accidental as the case with other types of covered occurrences.
This leaves many owners of defective buildings unable to collect from their CGL policies for the defects. Sometimes their only option is to sue the general contractor or subcontractor.
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.
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.
CBD Industry Offers New and Exciting Opportunities for Mall Owners
With widespread mall closures for retailers like Nordstrom, JC Penny, and Macy's, commercial real estate owners are scrambling to fill space. Two major mall franchises have announced plans to add CBD shops to their list of retailers. Learn more about this interesting development in the commercial real estate (CRE) industry, and how it could impact your bottom line.
Mall Franchises Partner with Major CBD Retailer
Two mall franchises, Simon Property Group and Brookfield Properties, recently announced their plans to partner with the major CBD retailer, Green Growth Brands. More than 200 CBD shops will be opened in malls across the country over the next year. With a strong growth history and high-quality products, the CBD company is expected to flourish inside of malls.
Specifically, Green Growth Brands will be featuring its health and beauty stores inside of malls. They own two specific (but different) brands - one focused on soaps and shampoos, the other on the empowerment and wellness of women. The opening of CBD flower shops is also expected in some locations.
Combatting the “Expectations Gap” in Commercial Real Estate
Most everyone knows what it feels like to plan something and set expectations on the outcome, only to encounter an obstacle along the way. Almost immediately, the bottleneck increases stress levels - because, as everyone knows, complications lead to delays and less than optimal results.
In the commercial real estate (CRE) industry, the space in which these losses occur in are known as “expectations gaps.” For the commercial investor and their team, the consequences of a gap can be dire, resulting in lengthy delays and lost income. Learn more about what causes these gaps, and how your firm can overcome them, in the following sections.
CRE Lawyers and CRE Investors - Results vs Expectations
Real estate attorneys are often seen as the “bad guy” in a real estate deal - the reason that bottlenecks occur. This is not the case, however.
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