Despite the negative effects of the COVID-19 pandemic, commercial real estate in the United States still boasts an impressive valuation of $1.0 trillion, according to IBISWorld. Some experts also anticipate substantial growth for the sector in the coming years.
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People want to learn how to lead well. Just look at the perpetually burgeoning publishing field of leadership manuals. From time-worn classics such as Sun Tzu’s The Art of War and Dale Carnegie’s How to Win Friends and Influence People to newer additions such as Good to Great by Jim Collins and The 21 Irrefutable Laws of Leadership by John C. Maxwell, there’s no shortage of practical and inspirational tomes about how to become a great leader. However, these books often run into a common issue: Because they’re written for a general audience, implementing their recommendations can prove challenging when applying them to a specific field.
Construction managers can have challenging jobs — and some might even consider them the most important part of an entire project. True, owners set the vision, and project managers oversee the entire thing, making sure it starts well and finishes strong. The role of a construction manager is different. Construction manager duties involve the starting and finishing of the structure (or structures), the task of turning an empty space into an edifice. Unfortunately, owners and project managers don’t always understand a construction manager’s daily tasks, so when issues crop up, so can unnecessary conflicts.
There’s no doubt that commercial construction is big business. Despite the fact that construction suffered a worldwide correction in 2020 due to the COVID-19 pandemic, ReportLinker estimates that “global construction output will expand by 4.5% in 2021,” and Statista reported that the “construction industry grew to a spending value of close to 12 trillion U.S. dollars before the coronavirus pandemic.” But this doesn’t mean that the industry is without challenges. A 2015 report by KPMG discovered that more than two-thirds of owners blame contractors for underperforming construction projects and more than half had an underperforming project during the last year.
To many tenants, landlording seems like a risk-free way to basically print money, an investment approach with precious few downsides. How wrong that idea is! Veteran and neophyte landlords alike understand just how challenging and problematic a task it can become. Just consider the task of acquiring — and then retaining them. Some landlords swear that signing multi-year leases provides them with the best possible return, but does it really just open them up to more risk?
Whether you have a successful or struggling business, you may find yourself looking to get out of your lease. Your reasons may vary and include anything from needing a different space to requiring a geographical change, from struggling to meet your current rent to discovering that your landlord is more trouble than he or she is worth. In any case, when you’re wondering how to get out of a commercial lease, it pays to know your options — and one of the most important is a commercial lease buyout.
The United States traces its common-law heritage back over more than a millennia, and the statutes regulating real-estate transactions have changed substantially (to put it mildly). According to a study by Paula C. Murray that was published in the University of Richmond Law Review, “The tenant bore all the risk of the physical condition of the property — caveat lessee. The tenant could provide for landlord repairs in the lease, but could not withhold rent if the landlord failed to make those repairs. Additionally, the tenant assumed primary responsibility for the condition of the premises once he took possession of the property.”
Recent world events haven't exactly been kind to either tenants or landlords. The worldwide lockdowns resulting from the COVID-19 pandemic have led to radical shifts in commercial real estate. Millionacres reported that high-end commercial districts in New York have seen precipitous drops in cash flow, while Daily Business Review stated that some commercial property types in South Florida have watched their transaction values halve on a year-over-year basis.
Investors intuitively understand that there are significant differences between residential property ownership and owning commercial property. For instance, residential real estate is private property intended to serve the round-the-clock needs of individuals, needs such as shelter and basic living space. Meanwhile, commercial real estate has its purpose right in its name: commerce. These locations facilitate trade and usually house businesses rather than people looking to lay their heads down after a long day.
Landlords and commercial property managers find themselves beset by all sorts of concerns. Routine repairs and ordinary expenses. Changes in the competitive landscape and shifts in local zoning codes. Tenant complaints and specific compliance tasks. It’s enough to make one’s head spin.