Commercial real estate: 3 risks to consider

Commercial real estate: 3 risks to consider

Facade of a glass covered buildingThere are many benefits associated with renting commercial property and many advantages associated with purchasing it in Illinois. Business owners who are interested in purchasing commercial property with the assistance of their Illinois real estate lawyer and real estate agent should consider three important risk factors before they make the final decision to buy.

1. The location may not always be beneficial

When it comes to owning a business, location is everything. Those who are thinking about purchasing commercial property should keep in mind that while the location of their property may be beneficial at present, it may not always remain this way over time. However, the reverse can also be true and a once undesirable location may turn into a trendy or high traffic area once several years have passed.

2. Cash flow issues may arise

After purchasing commercial property with the assistance of their Illinois real estate lawyer and real estate agent, many business owners choose to rent out a portion of their property to another company. When this occurs, business owners should remember that their tenant could stop paying their rent, the building may need extensive and expensive repairs or they may encounter other issues that compromise their company’s cash flow operations.

3. Liquidity can be compromised

While property buyers may be tempted to purchase commercial real estate because it can be a good investment, businesses often make the mistake of tying up a large majority of their company’s liquidity in real estate. Since commercial property can be difficult to sell, especially in a lagging market, business owners may find that they lack funding to manage their operations when they run into a difficult financial situation. Comparatively, businesses that own real estate are able to gain the security that comes with having something to sell if they do need capital in an unfortunate situation.

Making a good investment

To ensure they make a good investment in commercial real estate, business owners should completely assess the building’s location and potential risks before singing a final contract. Once they own the property, business owners should make frequent on-site visits to the location to make sure that they are able to identify problems before it’s too late to fix them.

Additionally, those interested in buying commercial property should consider consulting with an Illinois real estate lawyer throughout the duration of the purchasing process. By doing this, property buyers may be able to ensure that the sale goes smoothly and that they fully understand the risks associated with purchasing and owning a piece of commercial property.

Get Help Today!

Simply fill out the our online form, and one of our attorneys or staff members will contact you to schedule your appointment.

We value your privacy. Your information will not be shared without your permission.

captcha

The use of the internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.
I have read and understand the disclaimer

Memberships & Associations