In New York, commercial properties change hands quite frequently, and when they do, the existing leases usually stick with the property. In other words, if the tenants have valid leases, the new owner simply “steps into the shoes” of the former landlord, inheriting all its rights and responsibilities.

For anyone buying commercial real estate, it’s crucial to have experienced counsel review the current leases. Each tenant might have a different lease term, with various renewal options and rent schedules, so understanding the overall cash flow is essential. If the new owner plans to eventually occupy the space or repurpose the building, they need to know how long the tenants are legally entitled to stay.

When financing is involved, lenders often require agreements—like subordination, non-disturbance, and attornment—that confirm the lease details and protect both the lender and tenants. Tenants might also be asked to provide an estoppel certificate, which verifies the lease terms and assures that, as long as they meet their obligations, they won’t be abruptly evicted.

At closing, the process includes an assignment of leases, a prorated distribution of rent for the month, and the transfer of any security deposits from the seller to the buyer. After the sale, tenants receive official notice of the new landlord along with instructions on where to send their rent.

Sometimes, the new owner might prefer to start fresh—perhaps to use the space for their own operations or to reposition the property. In such cases, they may approach tenants with a buyout offer to end their leases early. The offer typically reflects the current rent and the remaining term of the lease, so it’s wise for tenants to seek legal advice if they find themselves in negotiations.

Due diligence and legal expertise are vital when navigating the complexities of commercial property transactions in New York City.