Law Office of Ryan S. Shipp, PLLC

Commercial real estate buying slower

Florida residents may know that real estate investment has slowed to a crawl in many parts of the country. This is true even as a real estate developer was elected president in November 2016. In New York City, sales fell to $4.3 billion, which is a 58 percent decrease from the same period in 2016. Sales dropped by 18 percent overall in the United States during that time period.

The drop itself has little or nothing to do with Donald Trump becoming president. Instead, it has to do with the idea that commercial real estate prices may at or near their peak. It is also thought that cities such as San Francisco and New York City are overbuilt. However, there are some concerns over Trump's tax plans and whether his agenda can be successfully carried out.

Even if his tax cuts are allowed to pass, it could create additional inflation, which could lead to higher interest rates. Higher interest rates are seen as a bad thing in an industry that takes on a lot of debt. The sluggish commercial real estate environment has caused landlords to reduce rents and banks to hold back on some lending. According to one developer, those who have planned well are selling units in their buildings even as the overall pace of growth slows.

Developers who are looking to invest in office buildings or other commercial real estate may wish to have the assistance of an attorney throughout the process. In addition to assistance in locating financing, there are a variety of legal hurdles, such as zoning and permitting, that need to be overcome before such a transaction can close.

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