Investors are interested in a particular set of selling points. Attracting the right buyer for your property will assist to sell it in a timely manner. Ensure your information is up-to-date and accurate, as it will come up at the negotiating table! It’s much easier to negotiate a strong and favorable contract if your information cannot be disputed.
Selling with vacancies versus no vacancy. Investors who are interested in turnkey properties love 100% leased properties, especially when the tenants have established businesses with long-term lease contracts. However, if your property is plagued with vacancy, fear not! There are buyers who are interested in opportunities to improve a building’s tenant mix and make improvements.
Current tenants. A rent roll provides a list of all your current tenants in your property, their contract expiration dates and lease rates. The more established businesses with long-term leases will be more highly valued than unknown companies with short-term contracts. If you are having difficulty selling a property, be sure to analyze the tenant mix. If a few of your tenants are weaker than others, you may have to make some changes in order to sell the building.
Clean up and repairs. Even savvy investors are prone to purchases based on emotion. Good first impressions can be crucial to receiving offers. Consider sprucing up your landscaping, cleaning vacant spaces and making repairs. There is no reason to wait to until repairs are completed to place your property on the market; photos and descriptions can be updated after your improvement projects take place.
Location highlights. While location isn’t the main focus for a commercial real estate investor, it is the number one concern for potential tenants. Be honest with the property’s location highlights because something you perceive as undesirable may be a selling point to someone else. For example, while some tenants prefer a quiet setting, others thrive in high traffic areas. Note your building’s most recognizable cross streets, its proximity to highways, public transportation, or other area retailers and traffic generators. An investor wants to know what potential tenants will be attracted to the particular location. Offering information about who currently occupies the space and what types of tenants are most successful can be an important selling point.
Property highlights. A thorough market analysis will give you a list of competitors and their amenities. Research the differences between competitive listings to understand their offerings compared to the sale price. Don’t be too discouraged if your property has fewer amenities than others in the area. Your cap rate is more important to an investor than the property’s bells and whistles. In fact, in some areas, keeping your amenities low will keep your costs down, which is a desirable trait for many commercial real estate buyers.
Demographics. Running a one-, three- and five-mile demographics report on your property will provide you with necessary insights into the surrounding population. Investors are interested in how tenants will perceive the surrounding demographics of a site. While many tenants prefer higher populations, others may prefer particular household income levels, age groups or property values.
If you will like guidance on selling your commercial real estate, feel free to get in touch. Trajan Investments has the expertise to provide professional advice.
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Trajan Investments, Inc. A Commercial Real Estate Brokerage and Consulting Firm.