Adapting to the Shifting Landscape: Real Estate Strategies in a Dynamic Environment

Published by BradyRenner CPAs | January 17, 2024

Shot of the System Control Monitoring Room.

Welcome to the first article in a series discussing the latest challenges in various industries, and navigating solutions with BradyRenner CPAs’ expertise. Here, we delve into the real estate sector, where the dynamic landscape requires savvy strategies and financial expertise for success.

In the ever-changing realm of real estate, BradyRenner stands out as a trusted source of financial acumen. Their expertise seamlessly aligns with industry shifts, making them a reliable advisor for businesses navigating the intricate landscape of real estate.

Real Estate Finance and Management

BradyRenner provides real estate developers, brokers, and property investors with the expertise you require to navigate investment opportunities and accounting and tax implications, and to create bookkeeping processes tailored to your business. They know that value is key, and as you identify the best ways to utilize real estate property and identify ways to maximize your return, our CPAs can help you create new value. 

BradyRenner guides businesses in the real estate industry through space evaluation and rent increases as well as real estate taxes. They stay up-to-date with changes to local and federal laws that impact the real estate sector in order to keep their clients informed and in compliance. The experts at BradyRenner are able to assist in evaluating investment opportunities as well as creating bookkeeping processes, accounting strategies, and tax and compliance solutions to suit your business today and in the future. 

In addition to guiding their real estate industry clients, BradyRenner’s extensive experience serves small businesses who lease and/or purchase property. BradyRenner applies their knowledge of the real estate industry to empower businesses with straightforward guidance to make informed decisions and maximize the benefits of their purchases and leases. 

Telecommuting Trends and Their Impact on Office Space

Undoubtedly, the largest change affecting office real estate is the surge in remote work. While working from home became a necessity for many businesses during the first months of the COVID-19 pandemic, many professionals realized that these remote work trends could continue successfully after health concerns had been alleviated. Due to this new outlook, many businesses were found rethinking their office spaces. With many square feet of workspace left empty, businesses began to consider office space downsizing or even eliminating permanent work spaces entirely. 

BradyRenner knows that office space evaluation is pivotal to continued business success. Using their financial expertise, BradyRenner helps businesses evaluate the financial implications of downsizing office spaces and ensures businesses make informed and cost-effective decisions aligned with evolving work patterns. Instead of rash decisions without careful consideration, BradyRenner takes all financial and professional considerations into account while advising businesses using their strategic real estate guidance.

Real Estate Purchase and Lease Challenges and Solutions

As companies realize they need fewer square feet of office space, many are seeking out smaller spaces to lower their office expenses. For many small businesses, physical office space makes up a large portion of their operating budget, so it makes sense to carefully examine the necessity of these costs. 

The first question they encounter is whether to lease or buy – and it’s a question that has significant budgetary and tax implications. BradyRenner’s CPAs can help clients assess whether it’s in their best interest to make a capital purchase, whether leasing is more advantageous, and how to navigate issues like hidden lease costs. These can include ambiguous operating expenses that the landlord can bill to your company, and capital expenditures such as a new HVAC system for the building. Additionally, prospective tenants will need to make sure that the terms of their lease allow for sufficient time to find a new space should the landlord intend on raising the rent significantly. 

Many other companies are renegotiating leases with their current landlords, potentially choosing to maintain fewer offices within the same building rather than move to another physical location. While it’s tempting to view renewal options as a simple matter, this is an opportunity for a landlord to make your agreement more profitable for their own business, so caution and care are needed. 

Consider the example of a fixed rate for an extended lease. While a fixed rate may put  a landlord in the bad position of receiving less rent than the space is worth, it could also see the tenant overpaying during an economic downturn. An alternative –  a fair market value renewal option – offers a rate which may fluctuate during the term of the lease. In order for this arrangement to be beneficial to your business, BradyRenner can guide you through the factors specific to your financial needs. 

BradyRenner has significant experience and know-how when it comes to navigating the financial complexities of commercial leases. They can guide businesses through their prospective lease agreements and narrow in on any hidden costs or provisions that could negatively impact the business in the short and long term. By assisting tenants with effective lease negotiation strategies, BradyRenner’s CPAs help ensure effective tenant financial safeguards which protect your business’s financial interests.

For more information on how BradyRenner can help your small business navigate through the ever-changing landscape of real estate, reach out today. And stay tuned for our next article, where we’ll address financial obstacles in the construction sector and share how BradyRenner is helping businesses address those challenges and secure their financial future.