Commercial Real Estate

At 32 percent of true value in money. Section 137.115.5, RSMo sets three subclass ratios: nineteen percent for residential (subclass 1), twelve percent for agricultural and horticultural (subclass 2), and thirty-two percent for utility, industrial, commercial, railroad and all other property (subclass 3). The subclasses come from Mo. Const. art. X, § 4(b). The practical effect is that identical true values produce very different tax bills depending on classification — which is why the classification itself is sometimes worth contesting, particularly for mixed-use or agricultural-adjacent property. Note also that § 137.115 was amended twice in the 2025 session; confirm the current ratios before relying on them for a multi-year underwriting model.

A replacement tax that applies only to commercial property. When Missouri exempted merchants’ and manufacturers’ tangible personal property from taxation under Mo. Const. art. X, § 6, taxing authorities lost revenue. Section 139.600, RSMo replaces it with a tax levied “against the assessed valuation of real property listed in subclass (3) of class 1” — that is, commercial and industrial property only. The rate was fixed county by county when first imposed and varies accordingly; the exemption and the replacement tax took effect January 1, 1985. It is a genuine carrying cost that residential comparables will not reveal and that out-of-state underwriting models routinely omit. Ask the county collector for the current rate on the specific parcel.

No. Mo. Const. art. X, § 25, adopted by the voters in November 2010, prevents the state, counties and other political subdivisions from imposing any new tax on the sale or transfer of “homes or any other real estate” — language that draws no residential/commercial line and reaches industrial and commercial transfers. Missouri had no transfer tax before 2010, and the constitutional provision forecloses creating one. Precision matters here: the provision bars any new tax imposed after its effective date; the reason Missouri has no transfer tax is that combination of history and the constitutional bar. Recording fees charged by the county recorder are fees for a service and are still payable. On a large commercial closing this is a meaningful cost advantage over Illinois or Kansas.

Yes — and this catches commercial contractors regularly. Section 429.012, RSMo requires an original contractor who performs work or furnishes material for “any building, erection or improvements upon land” to give the owner a written notice in ten-point bold type before receiving payment of any kind. There is no residential limitation in that language, and subsection 2 makes compliance a condition precedent to the creation, existence and validity of the lien. The section’s only exception, in subsection 4, carves out certain new residences where the buyer has mechanics’ and suppliers’ lien protection through a registered title insurance company — which confirms rather than contradicts the broader reach. A commercial general contractor who never gave the notice does not have a defective lien; it has no lien. See construction and mechanic’s liens.

Generally not in Missouri, and this is one of the state’s genuine advantages for commercial owners. Many states permit amortization — giving a lawful nonconforming use a grace period and then terminating it. Missouri does not. In Hoffmann v. Kinealy, 389 S.W.2d 745 (Mo. banc 1965), the Missouri Supreme Court held that terminating a pre-existing lawful nonconforming use after a grace period would constitute a taking of private property for public use without just compensation under Mo. Const. art. I, § 26, finding no material distinction between an immediate taking and a delayed one. For county zoning, § 64.255, RSMo provides a statutory parallel. The protection is not unlimited — nonconforming uses remain subject to doctrines about abandonment, discontinuance and expansion — but the use itself is durable, and it is an asset worth documenting at acquisition.

The standard you have to meet. Matthew v. Smith, 707 S.W.2d 411 (Mo. banc 1986) held that Missouri recognizes both under § 89.090, RSMo and applies different tests: a use variance requires a showing of unnecessary hardship, and an area variance requires only conditions “slightly less rigorous than unnecessary hardship” — practical difficulties. The classic unnecessary hardship showing is that the property cannot yield a reasonable return under any permitted use, that the plight arises from unique circumstances rather than general neighborhood conditions, and that the variance will not alter the essential character of the locality. Either way, granting a variance requires the concurring vote of four board members. Note that a “special use” or “conditional use” permit is a different creature — it is created by the local ordinance, and in many Missouri municipalities it is granted by the city council rather than the board of adjustment, which changes both the procedure and the review.

By petition for writ of certiorari to the circuit court, filed within thirty days. Section 89.110, RSMo provides that a person aggrieved by a board of adjustment decision may present a verified petition setting out that the decision is illegal, and “[s]uch petition shall be presented to the court within thirty days after the filing of the decision in the office of the board.” Two practical points. First, allowance of the writ does not stay the board’s proceedings — a restraining order must be applied for separately. Second, the appellate court reviews the board’s findings, not the trial court’s judgment, and reverses for lack of competent and substantial evidence only where the decision is contrary to the overwhelming weight of the evidence. Antioch Community Church v. Board of Zoning Adjustment, 543 S.W.3d 28 (Mo. banc 2018). That deference means the record has to be built at the board hearing, not on appeal.

Usually a special warranty. Section 442.420, RSMo attaches three covenants to the words “grant, bargain and sell” in a fee simple conveyance — seisin of an indefeasible estate, freedom from encumbrances done or suffered by the grantor, and further assurances — and the statute applies to commercial deeds exactly as to residential ones, because it keys to the words used and the estate conveyed rather than the character of the property. Because the encumbrance covenant stops at the grantor’s own conduct, that is a special warranty, not a general warranty. Two further points for a commercial buyer: the statute applies “unless restrained by expressed terms” in the conveyance, and commercial sellers routinely do restrain them; and the covenants attach only to the statutory phrase, so different wording may import nothing at all. Read the granting clause — your real protection is the owner’s title policy, not the deed.

Almost always, and Missouri law puts a warning in your hands. Section 381.015, RSMo requires that where a lender’s policy is issued in conjunction with a purchase-money mortgage loan and no owner’s policy has been requested, the title insurer, agency or agent must give the purchaser-mortgagor written notice explaining that the lender’s policy protects the lender and not the owner, and that an owner’s policy may be obtained within sixty days of closing at a stated cost. The statute contains no limitation to residential or one-to-four-family property — its trigger is transactional, so a commercial buyer financing an acquisition is within its terms. Note the duty runs to the title company, and violation is a level one violation under § 374.049. The statute also confirms something worth remembering: “A title insurance commitment is not an abstract of title.”

They are very different transactions. An asset purchase of the real estate itself gives you a clean start: you take the property, not the seller’s history, and your basis is what you paid. An equity purchase of the LLC that owns the property means you inherit everything the entity has ever done — contracts, litigation, tax positions, employment history, environmental conduct — and you inherit its basis, which may be far below your purchase price and will cost you depreciation for years. Buyers sometimes take the entity anyway to preserve a favorable loan, a liquor licence, a nonconforming use, or a lease that would not survive assignment, or to avoid triggering reassessment. If you are buying an entity, the due diligence expands well past the property, and the representations, indemnities and escrow become the deal. See mergers and acquisitions.

Section 1031 defers gain when real property held for productive use in a trade or business or for investment is exchanged for like-kind real property. Since the 2017 Tax Cuts and Jobs Act it covers real property only, and property held primarily for sale does not qualify. Two clocks run from the transfer of the relinquished property: 45 days to identify replacement property in writing, and 180 days to receive it — or the due date of that year’s return, if that comes first, which is why a fourth-quarter closing needs an extension to preserve the full period. Identification is constrained by the three-property rule, the 200-percent rule and the 95-percent exception. You cannot touch the proceeds: a qualified intermediary under the regulatory safe harbor holds them, and the intermediary cannot be a disqualified person — which frequently rules out your regular counsel or accountant. Reverse exchanges have their own safe harbor under Rev. Proc. 2000-37, as modified by Rev. Proc. 2004-51. Any boot received is taxable, and basis carries over: this is deferral, not forgiveness. Set it up before closing.

Yes, and the statute just changed. Section 347.186, RSMo permits an operating agreement to establish a designated series with separate rights and duties as to specified property, and provides that debts and obligations incurred with respect to a particular series are enforceable against the assets of that series only — not against the company generally or any other series. That is what makes the structure attractive for a portfolio. The section was amended effective August 28, 2026, and the amendment appears to attach conditions to the liability shield and to add filing requirements, with a compliance date in early 2027. If you already own Missouri property in a series LLC, or you are about to form one, this needs to be checked against the current text of the statute and the 2026 session laws rather than against how the structure worked before — an existing shield may depend on a filing. See business formation.

Bona fide prospective purchaser status — and it is the one CERCLA defense that tolerates knowing about the contamination. Under 42 U.S.C. § 9601(40) and § 9607(r), a purchaser who acquires after January 11, 2002 is protected from owner liability if it can establish, among other things, that all disposal occurred before acquisition, that it conducted all appropriate inquiries, that it gives required notices, exercises appropriate care by taking reasonable steps to stop continuing releases and limit exposure, cooperates with response actions, complies with land use restrictions and information requests, and is not affiliated with a liable party. Two cautions. First, the protection is not free: § 9607(r) also authorizes a windfall lien where unrecovered response costs increased the property’s value. Second, Missouri’s Voluntary Cleanup Program can produce a no further action letter under § 260.573, RSMo, but that letter is not a liability release, expressly preserves the department’s authority, and does nothing about federal CERCLA exposure.

Larger than the title commitment suggests, because a lien can be filed after closing for work done before it. Under § 429.080, RSMo, a claimant has six months after the indebtedness accrued to file the lien statement — so recent construction, tenant improvements, or even a roof replacement within that window is live exposure that will attach to the property you now own. Diligence: ask what work has been done in the last year, get the contracts and the payment records, identify every subcontractor and supplier, obtain unconditional lien waivers from each, and consider holding back or escrowing against the exposure until the filing period runs. On an active project, confirm the § 429.012 notice was given, because a general contractor who missed it has no lien at all. See construction and mechanic’s liens.

Two main statutory frameworks, both requiring local approval and neither automatic. Tax increment financing operates under the Real Property Tax Increment Allocation Redevelopment Act, §§ 99.800 to 99.865, RSMo, capturing the increase in tax revenues a redevelopment generates to fund eligible project costs. Chapter 353 abatement operates through an urban redevelopment corporation under the Urban Redevelopment Corporations Law, §§ 353.010 to 353.190, with § 353.110 providing up to ten years of taxation measured on land value alone followed by up to fifteen years at not more than fifty percent of true value — twenty-five years maximum. Chapter 353 borrows the TIF Act’s definition of “blighted area” from § 99.805. There are also brownfield incentives under §§ 447.700 to 447.718, which expressly bar an applicant who caused the release. Getting any of these requires an approved plan and a municipal ordinance, and the negotiation is where the value is.

On a commercial deal, the question is really when to bring one in, and the answer is before the letter of intent is signed rather than after. The LOI sets the price, the diligence period, the deposit structure and the exclusivity, and those terms are hard to move later even when non-binding. The places counsel earns the fee are the ones a form contract never reaches: negotiating the diligence period against the Phase I and survey timelines, drafting representations that survive closing, reading the title commitment’s Schedule B against the survey, reviewing every tenant lease and estoppel, structuring the acquiring entity and the financing, coordinating a 1031 exchange before closing rather than after, and pricing the zoning, environmental and lien exposure rather than discovering it. Commercial buyers are sophisticated and the law assumes it — there is far less protective doctrine than on the residential side, and what you get is what you negotiated.