Selling commercial real estate is one of the challenges that stakeholders in the commercial real estate usually encounter. It might be that your current commercial property involves a lot of energy for you to handle. It might be that finding tenants is very hard, or maintenance of the property seems heavy. It might also be that your business has outgrown the current location after decades of operation and you are ready to invest to another location.
In all these scenarios, learning to sell a commercial real estate is more of appearance as selling a residential property and can sometimes be very lucrative. Although it is exciting, you will have to do market research, realize the latest trends, know the challenges and plan, for you to break into the real estate market and make a fortune. Fortunately, we have some tips that we can suggest to you so that you can sell your commercial property smoothly and viable.
- Curb a nice appeal
View the outside of the particular commercial property keenly you intend to sell. Examine whether it will require an appropriate landscaping. If so you can wash parts of the building or apply a paint coat to the property so that it appears appealing and fresh. Where you find windows broken, make sure you have them replaced. Check also the road to the parking lot and also the parking and where you notice pot holes have them fixed immediately.
You can also remove any graffiti you find irritating. Improving the outside of the building makes it appear impressive to the potential buyers. When a building is neglected, it can deter buyers and to some extent affect the sale price. Make sure to put enough time cleaning and to repair the roof since it is crucial in making a positive appeal.
- Make a good interior appeal
It is also good for potential buyers to find the interior of the property in a comfortable position. The interior ought to be cleaned, and regular maintenance is made. Make the personnel involved with interior cleaning to scrub off old paint and apply new paint to the walls inside the building. As the floors and carpets are cleaned, minor repairs should make to areas where they appear torn. Before exposing the property to the market for potential investors to see, it will be best to make any major repairs that are needed.
In areas where things seem to clutter, work in such areas so that it becomes uncluttered and neat. When the place is clean enough, clients will appreciate having such a place. Even when tenants and employees occupy the building, it will be appropriate to inform them to maintain a clean environment constantly.
- Determine a pricing strategy
Getting a report of the comparable property near the property you want to sell is a good step. Examine the date of sale of such similar building, the price the building is being sold and the proximity from your building. It can sometimes be difficult considering some commercial databases you have to peruse in to get the information, but it is useful since it will give you an overview of the local market behavior.
After identifying the competitive buildings, take a tour of the place to gain hands-on knowledge. Through that, you will be able to study the location, lease rates and the amenities of your competitors. As a result, you will get an idea of the competition and know how you will measure up to it.
Apart from property tours and sales comparables, investors should also consider the ability of the commercial property to generate a handsome income. Gauging the true price for comparison of similar commercial properties is an extremely difficult task. As a result, the building’s Net Operating Income (NOI) is utilized for this task to both large and mixed use properties. Through that, a capitalization rate is used to compare your assets against others. The capitalization rate is the ratio between the investment cost of the property and the annual income gained from the property.
- Be aware of investor’s view point
Each investor has a viewpoint of the particular preferable commercial property. Availing accurate and up-to-date information to the right buyer will allow the property to timely sell. If the information is undisputed, a strong contract is easily negotiable.
Investors have different preferences depending on the needs so make sure you know about it. Some investors will purchase the building and later make desirable improvements to both the building and its tenant mix. There are others who are interested in 100% leased turnkey property so that the business can sustain the long-term lease contracts that businesses have with the tenants.
Make sure the location attribute of the property is clear. Although the location is not the main focus for a commercial real estate investor, be honest about the location highlights and explain any undesirable points. Expound on the recognizable cross streets next to your building, public transportation, highway proximity, and area traffic generators. Don’t forget the crucial details about the demographics. Investors need to know about the nature of the population, age groups, household income levels that will aid them to rank their investments.
- Find a professional Commercial Real Estate agent
For most investors, it is true that the procedures involved in selling a property can be a bit difficult. That is why a commercial real estate agent comes in handy to alleviate the stress and analyze the complications involved in the selling of the commercial property.
Though the stakes are high with the involvement of the commercial real estate agent in the transaction, the complicated process will be easy to maneuver through. Find a person you can trust to represent your best interest and build a mutual relationship. Above all, when acquiring a seasoned broker as your partner, make sure you look for the following skills.
- Expertise in the understanding of the local commercial market.
- Excellent in commercial contract negotiations.
- Possesses the best market research practices.
- Knowledgeable in marketing commercial properties.
- A worldwide presence able to attract qualified buyers.
- Embraces current marketing CRE technology.
- A strong operation in the community.
When you implement all the tips highlighted above, you will stand a chance of ensuring the selling exercise is flawless making you to make high gains from the commercial property.