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If you're struggling, you may be considering renegotiating your mortgage. Although mortgage renegotiation may temporarily help your cash flow problem, be aware that it may not be a permanent fix.

The risk involved—and the amount of leverage you have—in renegotiating will depend largely on the type of commercial property loan you have: recourse or nonrecourse. Before entering into a mortgage renegotiation, it is critical to understand your loan and ...

Evicting a struggling tenant is never easy. Handling an eviction poorly may create a contentious situation for you and your property manager, or even result in a lawsuit for wrongful eviction. In this economy, it is critical to take action as soon as a tenant sends a partial rent payment or misses a rent payment altogether. Nonpayment of rent is the most common breach of a tenant's lease, and a major signal that it is on the verge of a default. Protect yourself by f...

Office tenants that want the option of subletting unused individual offices in, or portions of, the office suite they rent often negotiate professional affiliate sublease clauses. Such a clause gives an office tenant the right to sublet to other professional tenants of the same or a similar type as it, or to professionals that it uses to run its business, without the building owner's consent.

You must be aware of the presence of hazardous materials on your commercial property so that you can not only minimize the risks they pose, but also use lease provisions that shift liability for them to your tenant. Before drafting provisions that specify these things, find out exactly what materials on your property are considered “hazardous” under the law. But be prepared: Hazardous materials are defined so broadly that virtually every commercial property&...

Finding a desirable tenant often is a challenge, especially in an economic downturn. To make sure you don't replace one struggling tenant with another, you may be tempted to tighten your tenant screening criteria, or screen more aggressively than you have in the past.

As an owner in the current recession, you probably thought that a tenant's bankruptcy due to the economic downturn would be the most difficult issue you would have to deal with. However, failing banks, unlike your other tenants, are not subject to the bankruptcy process under the Bankruptcy Code. Rather, they are subject to the FDIC receivership process—and, as the owner, so are you.

Struggling retail tenants may be able to blame their business's failure on things like poor sales, inconvenient locations, or unexpectedly high overhead. But occasionally, the owner is blamed for the failure, such as in a recent Maryland case.

Commercial owners have much to learn from the case law issued by the U.S.'s federal and state courts this year. The biggest challenge for owners seems to be understanding their responsibilities and rights under their leases and, equally important, negotiating unambiguous provisions that clearly define both.

As the recession wears on and continues to affect commercial real estate, industry professionals' instinct is to rein in spending, cut back to only essentials, and try to maximize profits. So it is surprising that real estate experts are recommending that commercial property owners invest in building upgrades to add value for current and prospective tenants, and offer lease incentives, such as two months rent-free, to fill empty space. What seems like splurging actu...