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    Here’s a checklist for commercial property owners or tenants
    • April 1, 2023

    Saturday was April Fool’s day, and I wish I had a pithy prank but my reservoir of humor ran dry.

    However, with the dawning of spring, the crack of the baseball bat on opening day, Easter, the Masters golf tournament and the NCAA final four, spring has officially sprung, and the first quarter of 2023 is officially in the books.

    Last week I wrote about the economy and its 2023 balance, so today I’ll focus on what you should have accomplished in the first quarter. Don’t despair, if you didn’t get it done, there’s still time.

    Review lease agreements

    Now would be a great time to put your hands on a fully executed copy of your lease and any extensions. Make sure all are signed by both parties.

    You don’t want to be scrambling around during a critical date with a half-executed document. This is best done at the end of a year with a careful eye toward any upcoming expirations, options to extend, rent increases or options to purchase, etc.

    But what if you occupy a building you own? Should you have a lease agreement with your operating company? Absolutely! I could write an entire column on the horrors of handshake agreements between related entities.

    Taxes

    Normally, corporate returns should have been filed by March 15 and personal by April 15, but this year, thanks to storm damage across the state, we get to sleep in until Oct. 15.

    Check with your tax professional as situations may vary. If your attempting to perfect a tax-deferred exchange, according to the IRS, the agency has extended the 45-day and 180-day 1031 exchange deadlines for eligible taxpayers. Those who qualify now have an extended general dostponement date of Oct. 16 to find a replacement property and close on a 1031 exchange transaction.

    Maintenance expenses

    Your landlord may lump all of your operating expenses into an annual amount and bill you on a monthly basis.

    Typically, budgeting for this occurs in October so that invoicing can begin in January. Taken into account are things such as property taxes, insurance and maintenance. If you pay too much or too little during a calendar year, the amounts are reconciled in the first quarter.

    If you’ve not received a reconciliation for common area maintenance, I’d suggest phoning your owner.

    Are all your entities active?

    A good time to check this is during tax time, but since the filing window for taxes has moved, make sure you’ve paid the state for those corporate filings.

    Check on business licenses as well. We represented a seller a few years ago who hadn’t paid his LLC filing fees for 28 years! You can imagine the drama and expenses necessary to reactivate his entity so that we could transact.

    Take a look at all of the physical elements of your commercial real estate, too.

    Now that the rain has (hopefully) subsided until fall, your roof may need more than a seasonal patch. With the crunch of repairs causing roofers sleepless nights, you might actually be able to hire one.

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    Now is a great time to check on your air conditioning as the hot months will be here soon. The sump pump on your truck well got a good workout last quarter. Make sure he’s up for the next soaking.

    Last but not least, plans for the balance of the year.

    Is a move in your future? With industrial vacancies still at historic lows, don’t wait until 90 days prior to expiration to commence the search. Most will agree a year to 18 months is appropriate for a proper search, negotiation, fit and relocation.

    Allen C. Buchanan, SIOR, is a principal with Lee & Associates Commercial Real Estate Services in Orange. He can be reached at [email protected] or 714.564.7104.

    ​ Orange County Register 

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