Commercial real estate investors can protect their portfolios

On Behalf of | Mar 14, 2019 | Commercial Real Estate

During the past year, some experts have discussed the possibility of a downturn in the non-residential property market. In this situation, certain types of properties may subside due to being grossly overheated. However, commercial real estate investors in New York can take a few steps ahead of a potential downturn to protect their financial best interests.

First, it may behoove investors to decide if their portfolios feature any properties that no longer meet their goals for the long term. If so, they may want to sell these properties. Now may be a good time to sell, as the market currently still has some velocity, and buyers are active. Investors could simply do 1031 exchanges into other properties that may be in alignment with their long-range objectives. This would allow them to defer taxes and tap into their equity to successfully trade into other properties.

Now may also be a great time to talk to existing tenants and try to get them to sign leases with longer terms. Investors might even want to make some capital improvements on their properties to demonstrate to their tenants that they value them. Landlords could even provide complementary rent upfront with the goal of getting more tenants to move in, as this could help them to keep revenue flowing in even if the markets go south at some point.

Buying and selling commercial real estate can no doubt be exhilarating. However, it can also be challenging and intimidating from a legal standpoint. Fortunately, an attorney can provide real estate investors with the guidance they need to navigate their transactions successfully in New York.