Your Ally In Construction

It is tempting to assume a commercial real estate transaction can't be much different from dealing with a house. However, there's a reason many organizations elect to use a commercial real estate broker for buying, selling, or transferring properties. If you're thinking about whether you need a broker who specializes in CRE, consider these four reasons to hire one.

Multiple Parties

Whenever you buy or sell a residence, there are typically two parties to the transaction. Someone owns the house, and they're selling it to a buyer. If you want to be technical about it, there may also be a financial institution involved. Still, it's not a complex arrangement.

Commercial real estate tends to be very different. On both the buying and selling ends of a transaction, there could be complex ownership and investment groups. Likewise, it may take more than one financial institution to fund the sale. A commercial real estate broker will have experience dealing with diverse interests so they can work to keep everyone on the same page.

There is also the issue of tenancy. Many commercial operations don't utilize the entirety of their buildings, and they often lease out the remaining space. Tenancy agreements add a layer of responsibility to an already complex situation.

Rights

Many commercial properties come with complex rights arrangements. For example, a business may need an easement to use a nearby road in a commercial district. Similarly, many taller commercial buildings have air rights issues involving the views from nearby buildings.

Likewise, you may encounter limitations on the use of the property in question. Particularly, zoning rules can impose challenges. You will want to know what the zoning situation is before you buy, and many buyers make sales contingent on zoning approval.

Regulations

Similarly, commercial real estate often runs up against regulatory issues. If a company wants to install gas pumps at a commercial property, for example, it may need to address regulatory concerns at the local, state, and federal levels. Many commercial buildings also have to comply with stricter building codes. If you plan to build a new structure or renovate an existing one, you will likely have to bring it up to code. Once more, contingencies in the deal are critical to protecting your rights while you sort out regulatory concerns.

Financial Reporting

Commercial real estate is an asset that's usually subject to financial reporting requirements. A broker can help you assess the value of the property so you can figure it into your reports.

Contact a commercial real estate broker for more information.