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

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

Source: FS – All – Real Estate News 1
7 ways to ensure your building doesn’t sell or lease