It doesn't take long to watch the news before it becomes clear that commercial real estate can be exposed to serious threats. These come not only from environmental factors, but also from people.
There are a few things managers and investors can use to protect their properties. This includes insurance as well as safety glass windows. What follows is a list of seven critical areas where commercial real estate could face real threats.
environment
One of the most transformative trends in commercial development in recent years has been the transformation of industrial locations into mixed-use retail stores. The examples of this phenomenon are numerous. Unfortunately, these benefits can be exposed to many environmental risks, such as groundwater pollution and other problems. These are difficult to fix and can cause problems for many years.
Tenant
It seems that disputes can arise almost anytime and about virtually anything from property damage to illegal use. These result from holes cut in walls, unauthorized work on HVAC systems, and prolonged exposure to moisture and other elements.
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One would have to live under a rock to be ignorant of the effects of online shopping on brick-and-mortar retail that directly impact commercial real estate. Shopping centers that once flourished and were full of shoppers are now empty. Empty shopping malls lead to vandalism, authorized entry and other criminal activity. Things like safety glass windows help prevent some of these problems, but they're just a start.
flooding
Rising water levels are an increasing problem in many areas. While commercial property owners are working to avoid these problems, much remains to be done. Many experts believe that recent storms are mild compared to future storms. The warming temperatures that our planet is experiencing from global warming are driving sea levels higher and higher and causing intense storms with ever greater runoff.
hail
Hail is by no means a problem only in rural areas, where agriculture predominates and unprotected cars can be damaged. Hail also causes serious problems with commercial structures, especially roofs that are fully exposed to these problems.
Fire
From accidents to the recent civil unrest, fire is more of a threat to commercial structures than ever before. Even technologies designed to help businesses have become dangerous with lithium batteries and overheated data devices. All of these and more can create serious fire hazards.
M & A.
The liabilities associated with commercial real estate transactions represent a high risk with high premiums and are potentially candidates for careful risk transfer. A contractor's mortgage and legal action from current or previous tenants are some of the many liabilities that should be reviewed to determine if a commercial property is a worth getting part of. It is an unfortunate fact that there is commercial property liability. It's part of the business world. Fortunately, there are things that owners, managers, and other shareholders can do to minimize and resolve these issues. It's not always an expensive proposition. All that is required is that adequate care is taken to effectively counter threats.
