Investing in commercial real estate in Miami can be a lucrative venture as it offers the potential for both rental income and property appreciation. However, when considering the purchase of a commercial property with an existing lease agreement in place, there are several factors to consider. Below we’ll offer some things to keep in mind as you navigate the complexities of such transactions.
The Benefits and Drawbacks of Pre-Existing Lease Agreements
Perhaps the biggest benefit to buying a commercial property with a pre-existing tenant lease agreement is that you will already be generating income on day 1. You won’t have to wait weeks or months to fill the space. That work is already done for you. Not surprisingly, financial institutions also have a greater preference for lending to investors who purchase leased spaces rather than empty ones.
On the flip side, one of the biggest potential drawbacks is that you must honor the existing lease terms until you are able to negotiate a new agreement with the tenant. If the lease is about to expire, you may have more flexibility in adjusting the lease or seeking new tenants, but bear in mind that commercial lease agreements are often 3-5 years in length, so it’s essential to consider all possible options when it comes to your commitment to the existing lease.
At the End of the Day, Every Purchase Agreement is Negotiable
All that said, at the end of the day, every agreement is negotiable. Should the right property become available at a good price – with the only setback being existing tenant lease agreements – it would be prudent to hire an experienced real estate attorney to review the lease agreements so that you can go into the closing with all the information and options at your disposal.
As you consider commercial real estate opportunities in Florida, get in touch with our experienced attorneys at the Law Offices of Alex D. Sirulnik, P.A. We will help you evaluate any existing lease agreement and develop a strategy to find the ideal resolution. Contact us today to request a free consultation.