Houston Commercial Real Estate Attorney

Guiding Clients Through Complex Legal Transactions

Houston’s commercial real estate market holds a great deal of opportunity for investors, but it is important to understand how the process works and the potential risks and benefits. Whether you’re considering your first commercial real estate property or currently dealing with a real estate dispute, working with an attorney who has an in-depth understanding of Texas real estate law and what goes into these complex commercial real estate transactions is essential.

When you have questions about commercial real estate — whether you’re buying, selling, or leasing — Jarrett Law Firm, PLLC, is here for you. We provide a wide range of commercial real estate legal services and can help ensure you’ve done everything you can to protect your investment. Call 346-683-2240 to schedule an appointment at our Houston law office.

What Types of Properties Are Included in Commercial Real Estate Law?

Commercial real estate law covers any property that is to be used for business purposes. Most commercial properties fall into one of the categories below.

Industrial Buildings

Industrial buildings are those that are used for warehousing or manufacturing purposes. Examples include distribution centers, cold storage facilities, manufacturing plants, food processing facilities, and bulk warehouses.

Hospitality Properties

Commercial hospitality properties generally involve those that cater to multiple guests. For example, hotels, casinos, and resorts would all qualify as commercial real estate properties. Individual properties, such as those used for Airbnb or other services, are more likely to still fall under residential real estate.

Retail Spaces

Retail spaces are those that are designed for customers to visit and buy goods or services delivered at that location. These can have multiple tenants, such as large shopping malls, or be standalone buildings that only have one store, such as a big-box store. Restaurants also fall into the retail category for commercial real estate.

Office Buildings

Office buildings are one of the most common types of commercial real estate — and one of the most profitable. These properties can be rented by multiple tenants or just one larger company. Office buildings are further divided into Class A, Class B, and Class C categories, depending on the amenities, finishes, and location.

Multifamily Housing

To be considered commercial real estate, multifamily housing generally needs to have at least five residential units on one property. Apartment buildings, senior high rises, and manufactured home communities all fall under this umbrella. Smaller rental properties, such as duplexes or triplexes, would still be considered residential real estate.

If you are planning on purchasing land for commercial use or the land is already zoned commercial, this may also count as commercial property for legal purposes.

What Do You Need to Consider Before Buying Commercial Real Estate in Houston?

Because of the wide variety of commercial properties and uses, investors often have different needs, goals, and strategies when it comes to buying and selling these properties. These are high-value transactions, and the best way to protect your investment is to plan ahead. Below are three primary factors to consider before buying commercial real estate in Houston.

Your Goals for the Property

The type of property you’re looking for is going to be very different if you’re planning on being a landlord than if you’re hoping to turn around and sell the property for a profit. Consider your goals and how involved you want to be in the property’s management on a day-to-day basis.

When it comes to the property itself, it’s essential to evaluate each potential space based on the location and the functionality the intended tenant needs. For example, if you want to buy a multi-tenant shopping center, a location that’s easily accessible from multiple major highways and has plenty of parking is key. Businesses looking to rent out office spaces may be more interested in inside finishes, how much natural light comes in, and on-site amenities.

Property Restrictions

While Houston doesn’t have traditional zoning rules, there can still be restrictions for specific properties that potential investors need to be aware of. Deed restrictions are one of the most common. Deed restrictions are the rules property owners must abide by, and they can cover everything from how the property can be used to what the exterior looks like. Deed restrictions are specific to the property, so you’ll need to ensure you’re aware of any that are present before buying. If you have questions about whether a property has any deed restrictions that are relevant to commercial use or whether you may be able to request an exception, a Houston real estate lawyer should be your first call.

Potential ROI

Any investment strategy is always focused on the potential return, and commercial real estate is no different. Higher interest rates can result in higher costs and decreased profit margins, and if you’re planning on leasing, the market rent will need to be high enough to cover your expenses and net a profit. While there are no guarantees in the real estate market, doing your due diligence and making sure the numbers make sense can increase your chances of making a profit.

What Are Some of the Common Challenges of Commercial Real Estate Transactions?

One of the benefits of working with a Houston real estate attorney is that you have access to their knowledge and experience when it comes to commercial transactions. Attorneys who practice in this area have seen it all and are able to put that experience to work for you, ensuring you’re aware of the potential pitfalls and prepared to handle any challenges that may arise, including those listed below.

Changing Market Conditions

The real estate market changes regularly, whether that’s adjusting to seasonal fluctuations in demand or the impact of interest rates and the number of available properties. It can be impossible to time the market, but there are strategies you can use to ensure you’re getting the best deal possible. An attorney can help you act quickly when you identify a property that fits your needs and help facilitate the agreement so that it goes through smoothly.

Title Issues

Title issues for commercial properties often look different than those for residential properties. For example, liens and easements may be more common and make it more challenging to complete the sale. An easement or boundary dispute can also impact how the property can be used, which is crucial in commercial property transactions. If any title issues are found during the title search, an attorney can help you determine how they can be fixed so the transaction can go through or when it may be in your best interests to back out of the deal.

Existing Tenants

Commercial landlords and property managers may be interested in buying properties that already have existing tenants. This can mean instant rental income and reduced marketing and holding costs. However, it’s also possible to inherit someone else’s problem when a tenant is behind on the rent or isn’t maintaining the property. Understanding who is currently renting the space and the terms of the existing lease can ensure you know what you’re getting.

How Can a Houston Real Estate Lawyer Help Protect Your Interests?

A skilled real estate attorney can provide knowledgeable legal assistance in matters related to contract drafting and review, real estate litigation, real estate disputes, and negotiating lease terms. At Jarrett Law Firm, PLLC, we bring years of commercial real estate experience to the table and are here to help you whether you’re buying your first commercial property or selling off a piece of your portfolio.

If you have questions about commercial real estate law in Houston, call 346-683-2240 to schedule a free consultation with an attorney at our firm. We’ll discuss your situation, go over the legal services we can help with, and get started right away if you decide you want to work with us.