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Oil prices and the effect on commercial real estate

Maryland commercial real estate investors and developers may have been hit hard by the plummeting price of oil in the last few years. While it might have been good for them as consumers, as business people involved in real estate, the opposite may have been true.

The drop in prices resulted in layoffs throughout the energy industry, and of the 350,000 people globally who lost their jobs, there were 217,000 in the United States. The effect of this economic slowdown was a drop in hotel stays, industrial occupancy and use of office space.

However, many companies negotiated with their landlords and did not give up their office space, so not all landlords suffered from a drop in income. Furthermore, the oil industry appears to be adjusting and recovering. However, a number of workers have moved into other industries. This means that oil companies may need to attract new workers. It is therefore expected that they may relocate their headquarters in areas attractive to millennials, and this may mean new markets opening up in cities throughout the country.

First-time commercial real estate investors might not have considered the effect of events such as a drop in oil prices as being relevant to their field. This may be the case with other aspects of real estate investment as well. However, an attorney may be able to assist both first-time and experienced investors with a number of issues that might arise in the course of real estate financing, purchasing, managing, developing and selling. These issues might range from understanding zoning laws to creating tenant agreements to doing environmental remediation.

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