Why Residential Contracts Do Not Work for Commercial Deals

Why Residential Contracts Do Not Work for Commercial Deals

Commercial real estate is not residential with bigger numbers. The structure is different. The risk is different. The language is different. Three major differences: Lease term length. Five to ten year commitments are common. Operating expenses. Taxes, insurance, maintenance, base year resets and expense stops can dramatically change total cost. Personal guarantees. Often required and negotiated. From my experience, business owners who rely on residential style thinking in a commercial transaction can expose themselves to significant financial risk.
/ Commercial Real Estate

About the Author

Lynn Drake’s status is well known in the industry: She’s the commercial realtor focused on maintaining “true north” for her corporate clients. It’s a reputation built on 35 years of commercial real estate experience. Lynn became a commercial realtor in 2001 after 15 years in corporate real estate. Thus far in her career, Lynn has successfully completed over 1,500 real estate transactions ranging from small business tenant leases to the sale and purchase of industrial complexes.