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Investors with commercial leases can protect investments

| Mar 14, 2019 | Commercial Leases

Over the past several months, some analysts that asserted that the market for non-residential properties may experience a decline. In such a situation, those who own properties featuring commercial leases, as well as other types of commercial properties, may find their properties losing value. However, they can make a couple of moves now in Los Angeles and elsewhere to keep their investments protected in the event of a future market downturn.

First, investors might want to assess their portfolios to see if they have any buildings that are no longer in alignment with their investment goals long term. If they do discover some unnecessary assets, they can simply sell them. Right now is possibly a great time to unload commercial properties because the market is still active. In fact, investors can execute 1031 exchanges, where they can legally sell properties and then reinvest the transactions’ proceeds in new properties, deferring capital gains taxes.

Another move that real estate investors could make is to see if their current tenants would like to sign longer leases. Building owners could also complete renovations of their buildings to show tenants that they are appreciated. Some investors may even want to become aggressive in their leasing strategies by offering free rent for the first month, just to get more tenants in the building. This may boost occupancy levels enough to keep the property bringing in adequate revenue, even if a market downturn happens.

Selling and buying properties that feature commercial leases can understandably be exciting. At the same time, it can be overwhelming, particularly for those who have not been exposed to the process before. An attorney in Los Angeles can walk an investor through the property-buying and property-selling processes so that he or she makes informed decisions that are in his or her best interests long term.