Best way to sell a privately owned office building in Northern VA?
March 6, 2014 6:12 AM Subscribe
There is an 4-story commercial office building that we'd like to sell. The building's tenants are professional businesses. We'd like to sell the building as soon as possible. Teach us how?
We've had the property appraised and inspected.
We've gone through four different brokers, where the first three seemed to idle their time and not generate any leads. The last one matched us up with a potential buyer, who drafted a pre-purchase contract, where the buyer had 80 days to perform his own inspection and secure a bank loan. The offer this buyer made was acceptable to us.
Buyer pulled out, however. Not sure on the reasons why, yet, but hope to gain some information soon.
I know little about selling commercial properties, and stepped into this as a consultant to try to get the building sold. I consulted some other folks, who recommended finding the biggest commercial real estate companies only, and working with them, as they'd have more exposure.
Does anyone here have any advice on what we should be doing, exactly, apart from contacting other brokers from larger companies? Things to watch out for?
Your recommendations would be much appreciated!
We've had the property appraised and inspected.
We've gone through four different brokers, where the first three seemed to idle their time and not generate any leads. The last one matched us up with a potential buyer, who drafted a pre-purchase contract, where the buyer had 80 days to perform his own inspection and secure a bank loan. The offer this buyer made was acceptable to us.
Buyer pulled out, however. Not sure on the reasons why, yet, but hope to gain some information soon.
I know little about selling commercial properties, and stepped into this as a consultant to try to get the building sold. I consulted some other folks, who recommended finding the biggest commercial real estate companies only, and working with them, as they'd have more exposure.
Does anyone here have any advice on what we should be doing, exactly, apart from contacting other brokers from larger companies? Things to watch out for?
Your recommendations would be much appreciated!
You do need to understand that many areas have an absolute glut of commercial property on the market, for sale, for lease, or both. I can't even count the number of such signs I see on my commute every morning, and I'm in a small city in central PA. In my previous city there seemed to be more space available than there was occupied. There were buildings and units available when I moved there in 2009 that were still vacant when I left in 2013. It's really a buyers market out there in many parts of the country.
In short, even the best, most active, most dedicated commercial realty broker may well find that any given property is really hard to move these days. It may be the case that nobody is doing anything wrong or failing to do something they should be. It may just be that the market sucks.
posted by valkyryn at 6:21 AM on March 6, 2014 [1 favorite]
In short, even the best, most active, most dedicated commercial realty broker may well find that any given property is really hard to move these days. It may be the case that nobody is doing anything wrong or failing to do something they should be. It may just be that the market sucks.
posted by valkyryn at 6:21 AM on March 6, 2014 [1 favorite]
Northern VA should be a good area to be selling right now as it is booming. I agree with the advice above to consult county information about recent commercial real estate sales. I'd also start calling various commercial real estate brokers and interviewing them. Eventually you will get a lay of the land, so to speak.
Then do a comparables analysis on similar properties (square footage, building age, location, amenities, tax-related stuff) to see what similar properties have sold for.
posted by dfriedman at 6:24 AM on March 6, 2014 [1 favorite]
Then do a comparables analysis on similar properties (square footage, building age, location, amenities, tax-related stuff) to see what similar properties have sold for.
posted by dfriedman at 6:24 AM on March 6, 2014 [1 favorite]
Another question to ask:
How long does it typically take to sell a building of this size? How many folks need to see it before it can be sold?
posted by Ruthless Bunny at 6:29 AM on March 6, 2014
How long does it typically take to sell a building of this size? How many folks need to see it before it can be sold?
posted by Ruthless Bunny at 6:29 AM on March 6, 2014
are any one or more of your tenants sufficiently bankable and interested in taking it off your hands?
posted by bruce at 7:35 AM on March 6, 2014 [1 favorite]
posted by bruce at 7:35 AM on March 6, 2014 [1 favorite]
I know little about selling commercial properties
Find someone who does. Probably look for the largest/most established commercial real estate broker you can find and dump the entire issue on them for whatever piece of the pie they want to charge you.
posted by feckless fecal fear mongering at 8:26 AM on March 6, 2014 [2 favorites]
Find someone who does. Probably look for the largest/most established commercial real estate broker you can find and dump the entire issue on them for whatever piece of the pie they want to charge you.
posted by feckless fecal fear mongering at 8:26 AM on March 6, 2014 [2 favorites]
Look at the nationals. We used Marcus & Millichap, who I would recommend locally but since I'm in a different area, I won't make a blanket recommendation as you should interview them with the questions above. Think about a sliding commission (stepped as to price achieved). Look at the caliber of their marketing materials for other clients, and their plan of marketing/the strength of their client list and what they've bought lately. Commercial buildings like yours are usually not "dogs" in a vibrant market. What "Bruce" said above too---talk to your tenants. Will your client be flexible, willing to take a land contract with a tenant?
posted by Lornalulu at 10:26 AM on March 6, 2014 [1 favorite]
posted by Lornalulu at 10:26 AM on March 6, 2014 [1 favorite]
Northern Virginia should be a hot commercial real estate market right now, particularly along the Metro's new Silver Line.
Are you unhappy with your broker? The buyer probably pulled out of the sale for reasons unrelated to your broker. I'd suggest going with a large commercial real estate company as well... but your broker DID bring you a potential buyer.
posted by tckma at 4:23 PM on March 6, 2014
Are you unhappy with your broker? The buyer probably pulled out of the sale for reasons unrelated to your broker. I'd suggest going with a large commercial real estate company as well... but your broker DID bring you a potential buyer.
posted by tckma at 4:23 PM on March 6, 2014
This thread is closed to new comments.
Interview those folks and go with the person you like most.
Ask some questions:
1. What will you do to market the property?
2. How many properties have you sold in the past 12 months, past 5 years?
3. Tell me about how you find your buyers.
posted by Ruthless Bunny at 6:19 AM on March 6, 2014 [1 favorite]