Those looking to pursue a commercial real estate investment in Guam are wise to take some time to understand the unique market conditions and legal frameworks that govern these transactions. A well-informed approach can help to enhance the chances of a successful investment. Below are tips that can guide investors through the intricacies of commercial real estate transactions on this Pacific Island.
#1: Know the market.
Billions in commercial loans are coming due in 2024, and financial analysts are voicing concern that many of those who invested in these properties continue to struggle to return to normal pre-pandemic operations and will be unable to pay the bill. This could lead negotiations for extensions on deadlines to buy some more time before the loan comes due.
There is some good news. Hotels, for example, are recovering after poor performance during the pandemic and industrial properties are also performing well. Office spaces remain a risk. Businesses in most markets continue to reevaluate how much in-person space they truly need for operations, and many are choosing to go with smaller spaces.
#2: Become familiar with the legalities.
Local laws and regulations will play a role in your transaction. This can include zoning laws and restrictions, as they can affect the type of business operations allowed on the property.
#3: Prepare to close the deal.
The closing process in Guam may differ from what you are accustomed to, so it is important to be prepared:
- Review all closing documents carefully to better ensure all conditions are met before signing, and
- Be aware of any taxes or fees associated with the transaction.
When entering Guam’s commercial real estate market, investors are wise to complete thorough due diligence before finalizing a deal. The tips provided serve as a foundational guide to embarking on a transaction that is both legally sound and financially rewarding. Whether you are a seasoned investor or new to the game, the importance of due diligence and legal counsel cannot be overstated. With the right approach, Guam’s commercial real estate market can offer lucrative prospects for those ready to take on the challenge.