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Commercial real estate properties may grow in rental demand

Real estate investors could find attractive opportunities by following trends in commercial leasing. As reported by Entrepreneur, properties offering warehousing and distribution capabilities have room for growth.

In 2020, consumers spent nearly $27 trillion globally on retail goods. Instead of visiting retail stores in person, many shoppers conveniently placed their orders online. Because of an increase in shipped products, storage and logistics facilities may offer valuable rental income.

Remote positions changed real estate demands

Companies across the nation shifted their workplace dynamics. By offering work-from-home positions, employers found ways to reduce their on-site footprints. With employees working remotely, some companies may not wish to renew their lease agreements.

Offering sharable office space may provide property owners with an additional way to attract tenants. Demand for co-working arrangements has surged. Research published in the Global Coworking Spaces Market 2021-2025 Report anticipates this sector to grow. The increase could reflect more than $13 billion within five years.

Commercial leases may include shared arrangements

Competition for tenants may require ironclad lease agreements. As reported by Millionacres.com, property owners have options to protect their assets. Contracts could, for example, include terms that address subleasing. A clause may require tenants to obtain a landlord’s approval for the businesses that sublease. Terms could outline a property owner’s right to review a subleased tenant’s financial statements.

Contracts may define which party has liability for unpaid rent or terminating an agreement before it ends. Lease agreements may also include late fees in addition to recovering the cost of removing furniture or debris when tenants leave.

Commercial lease agreements require detailed provisions to protect an investor’s property. Clear terms and conditions regarding how tenants may subdivide or sublease a unit may produce attractive leases while reducing the risks of legal action.

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