The world of real estate is continually changing industry through the ebbs and flows of politics, business, and market demand. In 2020, the world of real estate, like many industries, received the shock of a global pandemic, bringing many businesses and transactions to a halt. While it’s difficult to predict what will happen in these unprecedented circumstances, there are several things that we know can be expected from the BC commercial real estate market in the coming months.

Increased available space as a result of closures

The most immediate impact is one that many of us have already seen – the unfortunate permanent closure of small businesses and outlets. For those who were unable to take their services online, the inability to service customers but having to pay rent has ultimately led to the forced closure of many retailers. As a result, we can expect to see increased availability of commercial spaces popping up over the coming months. Some commercial property owners may find themselves stuck in precarious situations, where they are unable to collect rent due to a disgruntled tenant. If you need legal advice for a situation involving commercial property, contact a business lawyer right away.

Decreased Lease renewals

One positive aspect that has come as a result of the pandemic, has been the capability for many businesses to take their services online and reach customers virtually. This transition has made the need for a physical building less of a requirement and will likely contribute to a decreased rate of lease renewal. Once the term is up, it is expected that some businesses will be leaving their physical spaces permanently. While this is beneficial for business owners, commercial property owners could struggle to find tenants for their properties.

More complex Leases

As we noted above, finding tenants for commercial properties may become a challenge moving forward. With the length of the pandemic being undetermined, many businesses will be cautious to sign lease agreements without knowing if they can stay open through the fall. As a result of this uncertainty and caution, we will see an increase in complex lease agreements made to protect business owners and prevent the events of March from reoccurring. Terms of a lease can be made with specific rules and exemptions, designed to protect both the business and property owners. We recommend having legal aid when building these documents to protect all individuals involved.

At CBM Lawyers, we represent both purchasers and vendors in the purchase and sale of commercial and industrial properties. From writing a Letter of Intent right through to closing, CBM’s team is here to provide legal advice and guidance at all stages of the transaction.

Scott Johnston is a proud partner at CBM Lawyers LLP, specializing in business and real estate law. Contact us to learn how Scott can benefit your next transaction.