Keys to Determine the Right Type of Commercial Real Property Purchase and Sale Agreement

Keys to Determine the Right Type of Commercial Real Property Purchase and Sale Agreement

In an educational blog published by Tamara B. Pow, Esq.,a Business and Real Estate Attorney and a suggested real estate partner, it stated that, “the purchase and sale agreement (the “PSA”) is the central document for the sale of commercial real property and one of the most important.”

The details of the agreement are usually negotiated after the buyer and seller sign a Letter Of Intent (LOI), though the parties may skip the LOI and move straight to the PSA. Before devoting time and energy into negotiating the PSA, which is often a lengthy and time-consuming process involving numerous rounds of amendments before an agreement acceptable to both parties is achieved, a LOI should be utilized to ensure the parties agree on the basic conditions of the sale.

The party who provides the initial agreement has the advantage of being familiar with the document’s terms and structure, whereas the other party must read and evaluate the entire agreement in order to grasp it and any necessary adjustments.

Initial items to note are:

  • Sale Price

  • Deposit Timing And Amount

  • Accurate Identification of The Parties and The Subject Property

  • Time Permitted for Due Diligence (Including Title Review And Objections)

  • Length of the Escrow Period, the Representations and Warranties provided by each Buyer And Seller

  • Buyer And Seller documents that must be delivered to the Escrow Holder before the Close of Escrow

  • Any Special Clauses that either Buyer or Seller want incorporated into the PSA

The party examining the PSA should ensure that the LOI’s pre-negotiated terms are integrated into the agreement, and the PSA should be changed if it differs from the LOI. Because the sale price, deposit, subject property identification, length of due diligence, and escrow periods are often discussed in the LOI, a simple comparison against the LOI will confirm if these items are appropriately mentioned in the PSA.


During The Due Diligence Period

  • A preliminary title report should be obtained as soon as feasible since it enables access to documents listed in the title record that affect the property.

  • These documents are often mentioned as exceptions to the title insurance policy, and it is the responsibility of buyer’s counsel to determine which exceptions should be deleted, as well as to clarify the buyer’s responsibilities with respect to the exceptions that will remain, these are often agreements that run with the land.

  • The PSA should allow a buyer to request that the seller remove or change things highlighted in the title report, give the seller time to reply, and lastly provide the buyer the option to terminate the PSA without losing their deposit if the seller’s response is not satisfactory.

  • Other due diligence items will vary based on the buyer’s objectives for the property, and may involve things like getting a survey, testing the soil, inspecting existing improvements for dangerous hazards, and contacting the city about development plans and prospective zoning changes.

  • Experienced buyers who intend to redevelop the property will frequently negotiate a lengthy due diligence period to ensure that they will be able to secure the necessary permits and clearances. Otherwise they usually open to a shorter due diligence period.

Before The Due Diligence Period Ends
  • The buyer should be allowed to cancel the PSA without penalty and receive their deposit refunded in full (but will often be required to pay for escrow and title costs incurred). The money is non-refundable after the diligence time has expired and the buyer has not terminated the PSA.
“California PSAs typically include a liquidated damages clause which state that if a buyer breaches the PSA then the deposit shall be relinquished to the seller as liquidated damages,” Pow explained.
  • If a buyer breaches the agreement, it is usually after the diligence period because the buyer can no longer terminate it without penalty until the seller violates the terms.
  • From the buyer’s perspective, representations and warranties (reps and warranties) cover issues such as the seller’s authority to enter into the agreement and sell the property, whether the property is the subject of any lawsuits or threats of lawsuits, and whether the property violates any environmental or statutory laws.
  • They will also indicate that the seller has not filed bankruptcy and is not a foreign individual or barred person as defined by applicable statutes, that the property is not condemned, and that all third-party claims in the property have been revealed.
  • If the property is inhabited by a third-party tenant, the buyer should ask for a tenant estoppel as a closing condition and find out if the lease includes a Right Of First Refusal (ROFR) that allows the tenant to buy the property before anybody else.
  • If the lease includes a ROFR, the buyer will want assurance that the tenant is dismissing the ROFR before investing time and money in diligence, and the PSA should clarify that the diligence term does not commence until the ROFR is waived.
“Commercial real property in California is often sold on an As-Is basis, meaning a buyer accepts the property in its current condition without any warranties from the seller regarding the condition or use of the property. A buyer should confirm the As-Is clause makes an exception for the Seller reps and warranties specifically stated in the PSA to hold Seller accountable for these specific items,” Pow elaborated.
Escrow Closing
  • Closing instructions should be prepared by buyer’s counsel, outlining the documents that a seller must place in escrow before the remainder of the purchase money can be transferred to the seller.
  • Some buyers want the option to prolong the escrow close, and sellers are more amenable to this offer if the extension right compels the buyer to pay an additional escrow deposit.
  • Acquire an extension option during the LOI or PSA negotiations, as a seller is not obligated to agree to a closing extension if it is not included in the contract.
  • If the seller refuses to change the PSA to allow for a closing extension, the buyer may be pressured to close on time or be held in default of the contract, putting the buyer’s deposit at jeopardy.
  • Closing costs, which are normally divided according to county custom, although the parties will agree to distribute them differently, are a closing note on the close of escrow.
  • In either case, a buyer should double-check that the PSA appropriately indicates who is responsible for whose expenses, and that the settlement agreement matches the PSA.
To read more about a buyer’s perspective on Commercial Real Property Purchase and Sale Agreement, visit For commercial real estate consultations in Colorado, call/text
Cynthia Daughtrey, Esq.

There’s a lot to do in Twin Lakes, Colorado!

There’s a lot to do in Twin Lakes, Colorado!

This small and peaceful town in the Rocky Mountains is home to just over a hundred families. Located just south of Steamboat Springs and northwest of Denver, the Twin Lakes town is a precious gem in the Colorado mountains.
In the summertime, you can go fly fishing on one of Twin Lakes’ five lakes or take a scenic highway up to Independence Pass to get a look at some of Colorado’s most breathtaking scenery.
Its major attraction is its Whitewater Rafting. The lake has 2 small islands made up primarily of sandstone that are home to many species of birds, trees, shrubs, and other plants. It has a lot of natural beauty to offer with its crystal clear lakes, horseback riding trails, boat tours to Historic Interlaken Resort, and majestic mountain peaks.
At Twin Lakes, there are campgrounds available, as well as dispersed camping in various nearby places. On the southeast side of the Twin Lakes dam, no camping or fires are allowed. Besides its breathtaking scenery and vast landscapes, there’s a lot to do when you visit Twin Lake, Colorado!
Despite its size, this town has many things to offer like the local Twin Lakes General Store, Saloon, the library, and the community center. The Twin Lake Community Center offers a variety of activities such as arts and crafts classes for kids and Zumba sessions for adults.
The Twin Lakes area is great for outdoor recreation, with multiple ways to enjoy the outdoors from hiking and fishing to snow sports. Find out how to stay safe in the backcountry during the winter. Also, learn how to maintain Leadville and Twin Lakes looking their best.
There are several breweries in the area and restaurants in downtown Twin Lakes serving up fresh and local ingredients.
It also offers a variety of attractions from museums to historical sites and ghost tours. There’s even an observatory for those interested in astronomy, you can go also visit the Shooting Star Gallery.
In addition to all these activities, Twin Lakes is also known for its delicious food options like fresh fruit ice cream which you can find at the ice cream shop on Main Street, or other delicious food places like ‘The Log Cabin‘.
After a day of adventures, Twin Lakes has a lot of inns, B&B, lodge, and cabins that you can book ahead of time. From May through October, the Twin Lakes Inn is available nightly to the public, as well as on weekends and for private events during the winter season. You may visit Leadville Twin Lakes to know what’s new in town!
See you at the lakes!
What to Do If Your For-Lease Space Is Still Empty

What to Do If Your For-Lease Space Is Still Empty

Despite the fact that the commercial market is on the mend, some landlords are still having difficulty finding suitable renters for their properties. What should you do if you’ve computed an exact rent and advertised it to clients but can’t fill your vacant commercial space?


Consider these creative strategies for novice property investors and seasoned landlords alike before calling a real estate broker to help you sell your property.

Provide lease terms that are flexible

When a company is looking for office space, it can be very difficult to find the perfect location. This is because there are so many factors that need to be considered. The size of the office, the location, and the lease terms. If a company finds a perfect space but does not like the lease terms then they might not move in.

Term lengths of one or two years are becoming more typical. You can also provide benefits like reduced or free rent for the first few months. Lessees are more inclined to sign a longer lease once they’ve settled into the premises and their business has taken off. This will allow them to negotiate better deals and get what they want in an office space without having to settle for less.

Allow for space customization

The more you have the potential to customize your space, the better.

The first step in customization is determining what your clients need. Do they need office space with a conference room? Do they need an open floor plan? Do they require storage space or a reception area? Once you know what they need, then you can start thinking about how best to create those features in their lease.

Make sure the scope of the renovations and the financing are agreed upon before work begins. Some tenants may gladly accept a long-term lease if the landlord pays for some or all of the renovation expenditures, which can be a great bargaining chip.

Convert your office into a co-working space

The demand for co-working spaces is growing in the US. That is because more and more people are looking for flexible work spaces. The trend is also picking up in other countries as well. This has led to a shift in commercial real estate where landlords are converting their vacant office space into co-working spaces.

The conversion of vacant office space into co-working spaces can be a lucrative business opportunity for landlords as they make money from both the rental and leasing rates.

Pop-Up Book Stores

Book Pop-Up Shops are a new way of promoting and selling books in different places. These shops can be used for a variety of purposes, such as book signings, author readings, lectures, workshops, and more. All that is needed to create one is the space to put the books on display.

For those who own commercial real estate looking for an alternative form of income or those who want to promote their property in order to get it leased out quickly, this could be a great opportunity.

Make Your Space a Private Event Venue

The idea of renting out commercial space for private events is not a new one. It’s been around for decades. However, in recent years the trend has exploded.

Private event spaces are great for hosting meetings, workshops, conferences and other corporate events that need a space that is more intimate than a ballroom or conference hall.

Private event spaces also provide an opportunity to increase revenue streams by renting out their space to private groups and organizations as well as businesses looking to host off-site meetings or training sessions with their employees.

When Is It Time to Sell?

So you have decided to sell your property. Before anything else, it is a good idea to sit down and clarify your motivations and draw up a basic time frame for the selling process.

Cynthia Daughtrey, Esq.
Commercial Real Estate Points to a Booming Market…and Here’s Why!

Commercial Real Estate Points to a Booming Market…and Here’s Why!

When you combine commercial real estate and the pandemic, you might think of a downfall of an entire industry.


Employees are working from home, leaving office buildings vacant. Restaurants closed and people holed up in their houses. Customers are leery of stores, thus they prefer online transactions and deliveries.


Over the last two years, this has become our new normal. However, as the pandemic looks to be waning, specialists in the commercial real estate industry, both nationally and locally, depict a significantly more upbeat picture for the commercial real estate industry. But before we go into detail about the commercial real estate market in Colorado, it’s important to understand that the state’s economy is still recovering.


As of today, gatherings are now allowed, thus, offices, restaurants, inns, resorts, and all other commercial offices are opening their doors to everyone. According to UNWTO, tourism enjoys a strong start to 2022, international tourist arrivals could increase by 30% to 78 percent in 2022 compared to 2021, according to projections. However, this would be 50 to 63 percent lower than pre-pandemic levels. Nonetheless, everyone is coping and the commercial industry is back and kicking the stats high.

March 2022 average asking prices rose as the market received a slew of new listings.


In March, the average asking price per square foot increased by 2.72 percent over the previous month, with cap rates contracting by a small 0.14 percent. During the same time period, occupancy rates increased by 1% as tenants moved in and landlords listed their more crowded properties.


Prices and tenant occupancy in office and retail properties are both increasing.


Office and retail properties, which were among the most severely damaged by the pandemic, showed indications of recovery. Office assets increased by nearly 6% month over month, while occupancy increased by 2%, indicating a continued “return to the workplace” and firms implementing their physical footprint plans as property values grow.


Tourism in Colorado resort towns will continue to strive.


Colorado ski resorts are in a different place now than they were ten years ago, with strong brand recognition and less demand for destination marketing. In general, Aspen and Vail are well-known ski towns in Colorado; over 95 percent of Americans are familiar with them. In essence, a decrease in marketing will have little or no effect on the number of visitors to the various mountain communities.

Meanwhile, according to local analysts, demand for industrial and warehouse space has risen dramatically in recent years, owing in part to the boom in e-commerce, which was fueled in part by the pandemic. Rents have risen as a result of a scarcity of available industrial building sites.


Overall, Colorado’s real estate market recovered faster than most other states because it continues to be such an attractive area to live and invest in. If you’re looking forward to learning more about Colorado, check out

What You Need To Do Before Putting Your Property Up For Sale

What You Need To Do Before Putting Your Property Up For Sale

In the age of the internet, we have to be more connected to sell a property to that right Buyer. Being top in your field of online engagement with potential Buyers has become easier to get your property out there and receive higher offers from customers.

People can list properties on a number of websites, they can also use email or social media sites. When listing a property on these platforms, they need to be able to provide all the pertinent information about the home so that potential buyers know what they are getting into. This includes pictures or videos of different rooms, amenities offered in the area and information about local schools and activities in the area where they live.

So let’s go over what you need to do when it comes to preparing an effective real estate listing:

Where is this property?

As the property market is becoming more and more competitive, there are many property listing websites that users can choose from. It is important for these websites to provide the most accurate and up-to-date listings as possible.

The main issue with these websites is that they often mix up properties by location. This is a result of using keyword search engines to find properties, where one can use any keywords and not specific property details to search for listings.Your listed property should include details about the property, such as the price, location, and availability.

When to sell your property?

Timing is key in real estate. You have to be strategic when you want to sell your property. You need to take into account various factors such as the time of the year, location, and your personal needs.

There are certain best times of the year to list your home for sale if you want to maximize its value and attract a lot of buyers. The spring and summer months tend to be peak seasons for home sales, but it also depends on the location and what you need from a property in order for it to work well for you.

The time it takes for a home to sell is largely dependent on the preparation done by the seller. Before listing their property, sellers should ensure that their home is in the best condition possible and that its price is competitive. Sellers should also set a timeline and budget for their sale and be prepared to pay all of the expenses that come with it.

Set a realistic price

Pricing is a complicated subject. Property listings and properties themselves vary in quality and location. Setting a realistic price is vital for maximizing your sales and attracting the right clients.

The most important thing to remember when setting a realistic price is that it depends on the property listing, not just on the property itself. A realistic price for your property will depend on the location, neighborhood, amenities, and the condition of your home.


A realistic price will help you get potential buyers. A low listing price might lead people to believe that your home is not worth much, or that it needs many repairs, or that there are other issues with the home.

Research comparable properties in your area and adjust your listing price accordingly.

Hire an agent who knows the market

Listing a property is not always an easy task. You have to do the research, gather data, and take photos. But with all these digital advancements, it has become much easier to list your property online and get the best deal possible.

However, it is important to know what you are looking for in an agency before you start looking for an agent. They may specialize in a certain region of property such as rural property or apartments. Or they may specialize in a specific type of property such as commercial property or residential properties.

Hiring an agent who knows the market will increase your chances of getting your place sold quickly and at a higher price than if you were to sell without their help.

That is why if you’re planning to sell, we got you covered!

Westward Advisors will take care of preparing your listings, taking photos for you, and marketing the listing so that you can focus on moving ahead with your life. We are you Local Real Estate Team with a Global Reach that specializes in both residential and commercial properties.

About Westward Advisors

Westward Advisors has accumulated over $400 million worth of real estate in the 15 years it served in Chaffee, Lake, Summit, Park, Clear Creek and Jefferson counties. We are experts when it comes to the understanding of critical deal points such as resort property management, HOA documents, Land conservation easements, water and mineral rights, specific state water access laws and FBO access, and zoning.


Westward Advisors has closed more than 500 property deals and raised over $500 million in monetary capital for investors in the last decade all while building inspiring community support. We devote ourselves to connecting our clients to the best mountain resources we can provide. Our network is focused on Resort, Ranch, Estate, Land, Investment, Public Ownership Projects and Land Preservation/easements.

Why Work with Westward Advisors to Sell your current property?

Professional Presentation: Our marketing is crisp and sophisticated. We believe that visually telling each mountain story engages the user and attracts buyers to your property. While there is no replacement for actually being in the mountains and seeing the ranch, our marketing program will bring them as close to that as possible.

Efficiency: We streamline the marketing and sales process to minimize your own time and effort.

Information from One Source:We provide the key pieces of information such as sales data, valuation analysis, title review and resolution if necessary, market trends, tips for better property showings, etc.

Network: From our complete network of Global Agents and area real estate agents to our database of over 120,000 high net worth individuals, we build a personal network for you.

3 Reasons WE ARE NOT in a Housing Bubble

3 Reasons WE ARE NOT in a Housing Bubble

Home values appreciate on average by over 15% percent in 2021 and are forecast to continue rising this year. Voicing concerns that we may be in another housing bubble like the one we experienced over a decade ago. Here are 3 reasons why that’s not the case and the market is completely different today…

1. This time, housing supply is extremely limited…


The price of any item is determined by supply and demand. If supply is high and demand is low, prices normally decrease. If supply is low and demand is high, prices naturally increase.


In real estate, this balance is measured in month’s supply of inventory, which is based on the number of current homes for sale compared to the number of buyers in the market. The normal months’ supply of inventory for the market is about six months. Anything above that defines a buyer’s market, indicating prices will soften. Anything below that means it’s a sellers market in which prices normally appreciate.


Between 2006 and 2008, the month’s supply of inventory increased from just over 5 months to 11 months. The month’s supply was over seven months in 27 of those 36 months, yet home values continued to rise. Month’s inventory currently stands at 2.4 months – near historic lows. Remember, of supply is low and demand is high, prices naturally increase.


2. This time, housing demand is real.


During the housing boom in the mid-2000s, there was what Robert Schiller, a fellow at the Yale School of Management’s International Center of Finance, called irrational exuberance.


The definition of the term is, “unfounded market optimism that lacks a real foundation of fundamental valuation, but instead rests on psychological factors.” Without considering historical market trends, people got caught up in the frenzy and bought houses based on an unrealistic belief that housing values would continue to escalate.


The mortgage industry fed into this craziness by making mortgage money available to just about anyone, as shown in the Mortgage Credit Availability Index (MCAI) published by the Mortgage Bankers Association. The higher the index, the easier it is to get a mortgage; the lower the index, the more difficult it is to obtain one.


Prior to the housing boom, the index stood just below 400. In 2006, the index hit an all-time high over 868, meaning nearly everyone could qualify for a mortgage. Today, the index stands at 128.1, which is well below even the pre-boom level.


In the current real estate market, demand is real, not fabricated. Millennial, the largest generation in the country, have come of age to marry and have children, which are two major drivers for home ownership. The health crisis also challenged every household to redefine the meaning of home and re-evaluate whether their current home met that new definition.


This desire to win, coupled with historically low mortgage rates, makes purchasing a home today a strong, sound financial decision. Therefore, today’s demand is very real. Remember, if supply is low and demand is high, prices naturally increase.


3. This time, households have plenty of equity.


Again, during the housing boom, it wasn’t just purchasers who got caught up in the frenzy. Existing homeowners started using their homes like ATMs. There was a wave of cash-out refinances, which enabled homeowners to leverage the equity in their homes.


From 2005 through 2007, Americans pulled out $824 billion in equity. That left many homeowners with little or no equity in their homes at a critical time. As prices began to drop, some homeowners found themselves in a negative equity situation where their mortgage was higher than the value of their home. Many defaulted on their payments, which led to an avalanche of foreclosures.


Today, the banks and the American people have shown they learned a valuable lesson from the housing crisis. Cash-out refinance volume over the last three years was less than a third of what it was compared to the 3 years leading up to the crash.


This approach has created a level of equity never seen before. According to the U.S. Census Bureau, over 38% of owner-occupied housing units are owned ‘free and clear’ (without any mortgage). In addition, the ATTOM Data Solutions first quarter 2021 U.S Home Equity Report reveals:


“17.8 million residential properties in the United States were considered equity-rich, meaning that the combined amount of loans secured by those properties was 50% or less of their estimated market value… The count of equity-rich properties in the first quarter of 2021 represented 31.9%, or about one in three, of the 55.8 million mortgage homes in the United States.


If we combine the 38% of homes that are owned free and clear with the 19.8% of all homes that have at least 50% equity (31.9% if the remaining 62% with a mortgage), we see that 57.8% of all homes in this country have a minimum of 50% equity. That’s significantly better than the equity situation in 2008.


Bottom Line


This time, housing supply is drastically lower. Demand is real and rightly motivated. Even if prices were to drop, homeowners have enough equity to be able to weather a dip in home values. This is nothing like 2008. In fact, it’s the exact opposite.


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Want to more about home values before selling or buying a property? Call Lindsey Stapay at 970-435-5700 to arrange a consultation. While we’re at it, Lindsey will provide a private showing of all the properties for sale at the Summit County, Colorado just for you.