Commercial Real Estate Closing Tips

Per Bruce Myles, owner and founder of Proactive Commercial Lending Group, LLC,"a Texas Commercial Lender,"Commercial real estate greatly differs from residential. First of all, it’s not just a transaction between a single buyer and seller, rather, between several parties. And, it also involves several parties, some of which don’t have any real legal interest in the deal. It’s best to be in the know to buy or sell commercial property and to be prepared for the closing.

Commercial Real Estate Closing Tips

When you are involved in a commercial real estate transaction, you won’t be the only party. Not only will there be a seller, but other people (for instance, tenants). Not to mention attorneys, a title company, and more actors. All of these and more parties will play a role in a commercial sale. 

Therefore, you should have an actionable plan or it can quickly become a chaotic situation. Knowing zoning requirements, utilities availabilities, structural integrity, and more are also part of the transaction. It’s time to look into these things when you first begin the purchase process. Otherwise, these and other considerations can create nightmarish scenarios. 

Here are some more commercial real estate closing tips to help you enjoy a less stressful transaction:

  • ● Know the lender requirements. Every lender has their own requirements and even if you’ve purchased a commercial property before, it might well be different this time. For example, one lender might stipulate all requirements are met before the date of closing while others have different rules.
  • ● Have subordination agreements ready. Commercial properties with multiple tenants typically require subordination agreements. These include a SNDA or subordination, non-disturbance, attorney agreement. The SNDA documents are a critical part of commercial closing, so having these in-order is very important.
  • ● Be prepared for third-party delays. Sometimes, parties that do not have a direct role in the transaction might become involved. For instance, a local government might bring in certain obstacles and that can mean long delays.
  • ● Get the right person to sign documents. The governance documents need certain individual’s signature. But, it’s not always easy to get authorized persons to be on-site during the closing. Be sure to have a plan going forward so there isn’t a last minute delay. 
  • ● Take care of lien waivers. It isn’t unusual for commercial buildings to have liens and these can stop the closing from concluding. So, be sure to address lien waivers proactively.

Lastly, you should be proactive about potential delays. Speak with all parties to learn if there are any looming or possible obstacles. This way, you can address them ahead of time so the closing stays on schedule.

For help with Commercial Real Estate Loans in Texas please see http://www.proactivelendinggroup.com

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