Construction & Commercial Law Blog

Commercial real estate can be a rewarding investment for many in Missouri, especially those who wish to profit from a passive investment in the market. While investing in commercial real estate is far different than dealing with traditional securities, it can be a profitable, successful and secure opportunity. There are a few points of guidance that investors can keep in mind when selecting a real estate investment opportunity that is well-suited to their portfolio.

First, it is a good idea to review the sponsor of the project. The sponsor refers to the company or real estate development firm that is acquiring or developing a particular commercial property and seeking investors for the project. Sponsors, who are fiduciaries for project investors, have a responsibility to follow through on their business plans. Investors may have a choice between a more experienced sponsor with a long track record and a less experienced sponsor promising higher returns. In general, projections for experienced sponsors can be lower, but they are accompanied by a lower level of risk. Newer sponsors can promise higher returns, but the investment bears a greater risk of not meeting its goals.

Corporate board members and other officials in Colorado and throughout the United States have a responsibility, or a fiduciary duty, to act in the best interests of others; in this case, they specifically must act to preserve the value of the corporation. When corporate officials engage in insider trading or other deals that could be detrimental to the value of the company as a whole, this can be a breach of fiduciary duty to other shareholders, even when some shareholders may benefit from the arrangement.

A lawsuit that has been filed against Media News Group, the owner of 50 newspapers throughout the United States, and its major owner, Alden Global Capital, a New York hedge fund, alleges that parties have engaged in mismanagement and potential breaches of fiduciary duty. The case, filed by a minority shareholder in the corporation, seeks the disclosure of financial records and investment information. The lawsuit was filed by Solus, an investment company that owns 24 percent of the voting shares of stock in the media corporation. Alden, the majority shareholder, owns 50.1 percent of the outstanding shares in the corporation.

The commercial real estate market in Missouri and nationwide has produced double-digit returns for the last two decades. Although Colliers International's 2018 Outlook has declared that 2017 was the peak for the commercial property market, investors could still expect moderate returns in the coming years. By keeping an eye on the long term, investors could shield themselves from missteps during market fluctuations.

Market peaks and bottoms are notoriously difficult to recognize before they happen, which means investors should value the long-term potential of commercial real estate. The fact that real estate takes time to sell insulates it somewhat from market crashes. Signs of trouble cannot force investors to sell their assets quickly. This is the opposite of liquid assets like stocks.

Business owners in Missouri and around the country who routinely enter into contracts may be aware of how difficult it can be to keep up with them. According to estimates, inefficient contracting is responsible for a loss of 5 to 40 percent of the value of a deal. However, due to technological advancements, specifically artificial intelligence, businesses may be able to meet the challenges.

One of the main issues businesses have with contracting is the ability to manage the high quantity. There is usually no uniformity among the contracts, and they can be difficult to manage, update and organize in an efficient manner. Businesses lack a database that houses the contract information, and as a result, there is no quick way to conduct inquiries,such as identifying all contracts that use complicated outsourcing agreements. Any handling of the contracts, including drafting, executing and more, require significant manpower.