📅 2026 Update: Changes in Commercial Property Leasing

Since the original article was published, several important updates have taken place in the commercial property leasing landscape. These changes impact tax deductions, property rights, and costs related to commercial real estate. Readers will find the older article continues further down the page, offering foundational information on commercial leasing.

🏢 Energy Efficient Tax Deductions

As of June 30, 2026, the Section 179D energy efficient commercial buildings deduction is no longer available for properties where construction began after this date. This change affects those looking to invest in energy-efficient buildings and may influence future property decisions.

💸 Bonus Depreciation Restoration

The One Big Beautiful Bill Act, signed into law on July 4, 2025, restored permanent 100% bonus depreciation for qualified property acquired after January 19, 2025. This change allows for immediate expensing of certain property components, providing significant tax benefits to property owners.

🏛️ Uniform Real Property Acts

In 2025, twelve uniform real property acts were enacted by state legislatures. These include the Uniform Mortgage Modification Act and the Uniform Partition of Heirs Property Act, which enhance property rights for heirs in 24 states. This legislation could affect how commercial properties are handled in inheritance cases.

🏙️ New York City Tax Breaks

Effective January 15, 2025, New York State introduced a tax exemption under Section 467-m of the Real Property Tax Law for office buildings converted to rental housing. The most generous benefits of this tax break ended on June 30, 2026, making it crucial for property owners to act quickly.

📌 Key Updates Summary

  • 🏢 Termination of Section 179D energy efficient deduction for post-June 30, 2026 construction.
  • 💸 Permanent 100% bonus depreciation restored for qualified property acquired after January 19, 2025.
  • 🏛️ Twelve uniform real property acts enacted to strengthen property rights.
  • 🏙️ New York City tax exemption for office-to-residential conversions ended June 30, 2026.

💡 Tips for Navigating Commercial Property Leasing

Reviewing the details of your situation with your attorney can clarify your options in commercial property leasing.

🏠 Understand Your Tax Benefits

Be aware of the new tax rules, especially regarding the permanent 100% bonus depreciation. This can significantly impact your tax filings and financial planning.

🔍 Research Local Property Laws

Familiarize yourself with the uniform real property acts applicable in your state. These can affect your rights and obligations, especially concerning heirs and property modifications.

💰 Budget for Additional Costs

Prepare for various costs associated with leasing commercial properties. This includes closing costs, which typically range from 2% to 5% of the purchase price, and Common Area Maintenance (CAM) fees, which can add 20% to 40% on top of base rent.

📝 Keep Up with Tax Changes

Stay informed about any changes to tax deductions, especially regarding energy-efficient buildings. The termination of Section 179D can affect future investments in energy efficiency.

🏙️ Explore Conversion Opportunities

Consider the potential for converting office spaces into residential units, especially before new tax incentives close. New York City’s recent tax breaks for such conversions are an example of opportunities that may arise.

❓ Frequently Asked Questions

🤔 What is the Section 179D deduction?

The Section 179D deduction allows commercial property owners to deduct costs associated with energy-efficient improvements. However, this deduction is no longer available for properties where construction began after June 30, 2026.

💼 How do commercial property closing costs affect my budget?

Closing costs typically range from 2% to 5% of the purchase price for buyers, while sellers face costs of 4% to 8%. These costs can significantly impact your overall budget when leasing commercial property.

📅 Are there tax breaks for converting office buildings to residential units?

Yes, New York State introduced tax breaks under Section 467-m for office-to-residential conversions, which expired on June 30, 2026. This change encouraged property owners to consider conversions before the deadline.

⚖️ Can I appeal my commercial property tax assessment?

Property owners have the right to appeal property tax assessments they believe are too high. The procedures for appeal vary by jurisdiction, so it’s essential to understand local regulations.

🏢 What are Common Area Maintenance (CAM) fees?

CAM fees are additional costs that tenants may pay on top of base rent. These fees can add 20% to 40% depending on the property type and lease structure.

📈 How has commercial real estate construction spending changed recently?

In 2025, total construction expenditures for commercial real estate in the U.S. reached $336.2 billion, marking a 5.8% increase from 2024. This growth indicates a healthy market for commercial properties.

⚖️ Recent Cases in Commercial Property Leasing

Recent court rulings have influenced how commercial properties are leased and managed, impacting both property owners and tenants.

Readers can browse more rulings in the news section.

End of October 2026 Update





What is Commercial Property to Lease?

Commercial Property to Lease – or Commercial Property to Rent - is defined as the undertaking of commercial property in order to facilitate and house business operations and commercial endeavors on a temporary basis.

Lease Options for Commercial Property to Rent



Commercial Property for Lease

Triple Net Lease

A triple net lease is a type of lease undertaken within the renting – or leasing – of commercial real estate; the parameters of this lease state that the commercial tenant be responsible for not only lease payments, but also the provision of applicable taxes, repair, and insurance. Within the parameters of a Triple Net Lease with regard to Commercial Property to Lease, there exist a variety of advantages and disadvantages latent within such an option:

Upon choosing a specific leasing plan for Commercial Property to Lease for business use, an individual business owner may opt for  Triple Net Lease due to the fact that there exist a possibility to transfer the status of the lease to an intent to purchase

The Triple Net Lease allows an individual to maintain a heightened sense of authority and agency over the Commercial Property to Rent; rather than allowing the landlord of property owner to mandate or authorize upkeep, that authority is granted to the renter



Gross Lease

A Gross lease is another type of lease applicable to commercial real estate; in this lease agreement, the commercial tenant is solely responsible for the provision of lease payments – the landlord is responsible for insurance, tax, and maintenance payments; although this leasing plan differs from other leasing plans with regard to Commercial Property to Rent, both advantages and disadvantages are presumed to accompany any respective leasing plan:

Upon engaging in a leasing plan with regard to Commercial Property to Lease, the building owner or landlord will maintain control over repair and maintenance, freeing the renter of such responsibilities

A Gross lease relieves the renter from undertaking additional fees outside of the base rental payment upon undertaking a rental plan for a Commercial Property to Lease; this includes accompanying taxation, insurance, and funding for maintenance



Commercial Property to Lease vs. Commercial Property to Buy

For those interested in purchasing Commercial Property in lieu of facilitating a leasing plan with regard to Commercial Property to Rent, commercial mortgages are available to facilitate this process. A mortgage is a type of loanthat is utilized by an individual interested in obtaining property whose value exceeds the financial means possessed; however, upon approval, the borrower of a mortgage loan will be responsible for the following:

Upon the approval of mortgage loan, the borrower is indebted to a mortgage lender, which is the institution that provides a mortgage loan; the receipt of a mortgage loanwill typically include supplementary fees and financial restitution

Interest accrued from the initial loan

Penalties incurredresulting from late payments to the failure to make payments

The provision of collateral in the form of the property being occupied by the individual in receipt of the loan