Smart Selling with Ryan Schwalbe Broker - Spire Commercial Real Estate - July 2023
How to get the most out of your asset when it comes time to sell.
"The Best Time To Plant a Tree Was 30 Years Ago, and the Second Best Time To Plant a Tree Is Now." - Michael Scott
Often it's hard to take the long view in life. Our day-to-day trials and tribulations demand our attention; hopefully, we're equally busy enjoying ourselves. If you're a commercial property owner or an aspiring commercial property owner, you understand this. The time scale of real estate is different.
Here are just a few suggestions for those who want to get the most out of your asset when it comes time to sell:
Cashflow is king! - If your property has one or more Tenants (this could include your own business), a track record of solid rents (at market rate) from quality Tenants will go a long way when it comes time to sell. Strong financials require detailed/accurate accounting.
Deferred maintenance is a killer! - You know that roof or windows you've been putting off replacing - the boiler, HVAC, or lighting you've kept limping along one youtube video at a time? That's all value you leave on the table when it comes time to sell.
An ounce of presentation = a pound of performance. - Like or not, how your property presents and what kind of first impression it makes goes a long way. Paint, lighting, slab, asphalt, landscaping, fencing, quality cleaning, etc., can be a worthwhile investment prior to letting the world know your property is for sale.
Environmental ghosts - If your industrial property does not have a history of environmental contamination, congratulations. However, it's not uncommon to have a contaminated site on a General Business, Light Industrial, or Heavy Industrial property. Contamination does not prevent the sale of a property. However, what does scare off a lot of buyers is a lack of information on the contamination. Consider making environmental records in your possession (Phase One, Phase Two, Soil Samples, Ground Water Samples, Etc.) available to qualified buyers.
Every property is unique and will need to be handled as such, but these are the big elements I see daily.
All of these things take time. Hence the quote above. Think about these things, and come up with a rough plan and time horizon on the order of years or months, not weeks or days, for exiting an asset. Have your commercial broker involved in these conversations ;)
Sure, things will change, the market will move, but you'll be better prepared when we do get it on the market, and you'll be happy you did at the closing table.
Spire Commercial Real Estate