7 ways to ensure your building doesn’t sell or lease

Posted by Irvine Sign Company

Posted by Irvine Business Sign Company

My VERY best to you for a Happy Holiday Season! Merry Christmas and Happy 2019!

As we forge our way into the final year of this decade, I wanted to share the ways in which you can derail any effort to sell or lease your commercial real estate. So, in no particular order, here it goes.

Hire an un-cooperative professional

Remember, that name on the sign advertising the listing for sale or lease is your front man. All inquiries are funneled through his phone or email. If he is tardy with follow-ups, refuses to answer texts, emails, or calls or is generally non-responsive, you are sunk.

Ignore the offers below your asking price

Our market is changing. The days of multiple offers and frantic bidding are over. Carefully consider every serious proposal from qualified buyers or tenants. I believe you’ll be glad you did.

Market the building while it’s occupied

Generally, vacant buildings are the fastest to lease or sell. Specifically, spaces that have been vacated or properly staged, have new flooring and a fresh coat of paint are most desired. If your building has an occupant, sure, you get some marketing time while collecting rent.

The downside of this? Showings are challenging, buyers have difficulty envisioning their operation in the building, and tenants have to imagine post-occupant refurbishment. Plus, folks who need to occupy immediately are forced to consider readily available choices.

Set a ridiculous price

That is so 2017 of you! Nowadays, the emphasis is on a realistic value and motivation.

Don’t do any investigation

If selling, invest a few thousand dollars for an inspection and possibly an environmental report. You shouldn’t wait for your buyer to discover what issues exist. If leasing, assemble all the maintenance records and expenses. Plans or drawings are essential for either buying or selling. These items should really be accomplished prior to marketing.

Do it yourself

Sure, you may save the fee, but are you prepared to generate interest, field inquiries, arrange showings, negotiate proposals and execute the transaction? How do you ensure you’re getting top dollar? Are you keenly in tune with the last few deals that transacted? How will you justify your value with a lender’s appraiser? Suddenly, that 6 percent looks like a post-holiday bargain.

Value the property on projections not actuals

In up markets, sellers look to the future, project the next uptick in rents, even though there is lease term remaining, and create pricing based upon this dream. Buyers happily play along because of the lack of available buildings. Once the market changes – buyers scrutinize the numbers and are unwilling to buy on “maybes”.

Allen C. Buchanan, SIOR is a principal with Lee & Associates Commercial Real Estate Services. He can be reached at 714.564.7104 or abuchanan@lee-associates.com

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