Category Archives: Commercial Real Estate

Using Commercial Real Estate as Collateral for a Business Loan

Taking your company to the next level generally requires a substantial amount of capital. However, finding additional capital can be tricky.

Common ways to turn equity into cash
If you own commercial property and have equity in your building, land or equipment, you might be able to use it as collateral and turn that equity into cash by getting a loan with a:

  • Bank
  • Commercial finance company
  • Savings and loan company
  • Insurance company

This can give you the necessary equipment to expand your business and ultimately make more money.

You may have options, even if you currently have a loan
You may not own your land or building outright. However, if your property has increased in value since you first obtained your loan, you might be able to refinance it. Your new loan will pay off the original balance, leaving you with the difference to reinvest back into your business.

Enlisting professional help
Signing the necessary paperwork to use real estate as collateral is no minor endeavor. There is generally a lot of fine print in the documents. An experienced Dallas commercial real estate attorney can help you understand the nuts and bolts of the documents you are signing and  make sure everything is in order.

If you are looking to use commercial real estate as collateral for your business, you should call one of our Dallas commercial real estate attorneys at the Ferguson Law Group at (972) 378-9111.

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Negotiating Your Dallas Commercial Lease Agreement

Landlords need to consider many factors when negotiating a commercial lease agreement. The fact that many commercial lease agreements end up in litigation should serve as a warning that these contracts should be carefully negotiated.

Your commercial lease agreement may not be standard
Many landlords are under the impression that all lease agreements are standard, therefore not subject to scrutiny. There may be hidden risks and costs associated with your lease agreement. You cannot always depend on the knowledge of a commercial real estate agent.

Rentable area vs. usable space
As a landlord, it is important to understand the difference between rentable area and usable area:

  • Rentable area includes space that may not solely be used by a specific tenant, such as hallways, elevators and restrooms. You may require your tenant to pay a pro-rata share of these common areas.
  • Usable space includes the square footage that is contained within the leased space that your tenant will occupy and use for their business.

Other factors to consider
As you enter into a commercial lease agreement, you should consider the following:

  • Triple net lease and absolute net lease
  • Creating an entity to control your property
  • Gross lease and modified gross lease
  • Tax ramifications
  • Property management issues

There are many legal factors regarding your commercial lease agreement. Again, you cannot always depend on the expertise of your commercial real estate agent. Consulting with an experienced Dallas commercial real estate attorney may be your best bet. He or she can help you understand the nuances of your lease agreement and help protect you from future litigation.

If you have questions regarding commercial leases, you should contact one of our Dallas commercial real estate attorneys today at the Ferguson Law Group by calling (972) 378-9111.

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