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Over building and uncertainty slow commercial real estate deals

On Behalf of | Jun 2, 2017 | Real Estate Law |

Property investors in Ohio have to contemplate many elements, including financing and taxes, before entering a commercial real estate transaction. Growth in the commercial property sector has been strong for six years, but analysts worry that prices have peaked and some large cities might now have an excess of inventory because of a building boom.

Investors appear to be in a holding pattern because of the unknown fate of tax cuts proposed by the Trump administration, said an analyst from Green Street Advisors LLC. Even if taxes on businesses do drop, the possibility emerges that inflation could start because of increased spending. This could trigger higher interest rates, which factor strongly into financing decisions for expensive commercial properties.

According to Real Capital Analytics Inc., sales of commercial properties fell by 18 percent nationwide in the first quarter of 2016. Industry experts believe that the uncertainty surrounding the president’s current economic proposals has stalled deals throughout the country. When both buyers and sellers do not know what to expect, they hesitate to commit to deals.

Although economic ups and downs always influence commercial real estate, a person could still find opportunities in a market. When a person wants to investigate the viability of an investment in a shopping mall, office building, apartment complex or other commercial property, an attorney could assist with due diligence and the negotiation of the purchase agreement and financing. Investigations into the title, zoning, existing leases and easements could be conducted by an attorney. This information could aid the person in understanding the value of the property and any liabilities associating with owning it. Other services available from an attorney could include asking local officials for special building permits and zoning changes.