When Commercial Real Estate Goes Wrong

Commercial real estate properties are in high demand for wealthy investors. Indeed, when compared against other forms of investments, commercial real estate can pay out 10% or more per year. The diversity of the market never fails to attract investors looking for stable rents. Additionally, as they’re based on basic needs such as shopping, shelter, transport, etc., they represent one of the most secure forms of investments. In other words, commercial real estate is the golden path to wealth, except when it goes wrong. From accidents to negligence, landlords have a lot to tackle to make their investment work in the long term.

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 Don’t let the accident go unnoticed

If you’ve followed the news lately, you might have heard about the terrifying escalator accident at a metro station in Rome. Over 20 people were injured as the packed escalator suddenly accelerated, leading passengers to collapse onto each other at the bottom. Witnesses recalled a roaring sound before the incident. They had no time to warn or rescue those riding on the stairs. The investigation is still ongoing to determine the cause, but as several football fans – most passengers had come to Rome to watch a football match – have sustained severe injuries, including an amputated foot, it’s fair to say that they will look for compensation. In such a case, a personal injury lawyer can fight for the rights of the victims and claim payments if the landlord is found guilty. However, the possibility of a terrorist act is still open.

Employers are responsible for the office space

Without going to the extent of a faulty escalator, a landlord is responsible for the quality of the commercial space. For instance, in a situation where most companies rent out their offices, the health responsibilities are divided between the employer and the building owner. The employer needs to provide the furniture and productive space to the team. The landlord, however, has to review maintenance equipment such as ventilation, plumbing, heating – unless the lease stipulates that maintenance duties are with the tenant. Employers and employees can make the landlord pay compensation and repair costs for maintenance issues.

Health and safety requirements vary across the world

When it comes to international commercial properties, the regulations about health and safety can vary dramatically. Electric appliances and systems can be banned in one country and authorized in another. Similarly, architectural safety equipment can be a source of worry. A hotel in Spain has recorded several accidental death from balcony fall over the course of the year. Where the landlord is not legally responsible, it’s worth considering the purpose of the building and making the necessary adjustments to its structure.

What happens to empty stores?

Empty stores are appearing everywhere in town, as retails are slowing down activities or closing. Unfortunately for investors, an empty store is a risky investment. Indeed, landlords might need to cut down rental prices to attract new retailers. A solution is to offer short-term lease contracts, which can encourage small businesses. When no retailer can be found, the store is left empty.

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Commercial real estate promises a high return rate. However, when you buy a property, you need to acknowledge your responsibility towards your clients and their audience. Failure to do so can turn a property that would have been profitable on paper into a vast waste of money.


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