Welcome to the second video in the Kollosche Commercial video series.
Just like residential real estate, how you prepare your commercial property for market will significantly impact the final sales result. When selling a residential property, you will get advice on what renovations may be needed, take care of any maintenance issues and style the property to highlight the features you wish to sell. Commercial property is much the same, the only difference is the factors that you consider will vary.
1. The Property’s Appearance
Most commercial properties are tenanted investments, and the general maintenance may fall to the responsibility of the tenant. However, before going to market, it is always a good idea to check the building and ensure that it is well presented and maintained. Just like residential property, any small steps you can take to make a great first impression can go a long way and ultimately increase the property’s value.
2. Property Leasing Structure
Assuming you have the luxury of holding off before putting your property on the market, the timing of when you decide to sell a tenanted leasing agreement may have a significant impact. Consider putting the property on the market either just after a lease renewal or communicate with the tenant early to discuss re-signing their lease. This ensures that you have the longest tenure available. This will have a huge impact on the yield or returns that a buyer is willing to pay.
3. Due Diligence and Preparation
This is a step our Kollosche Commercial team always makes sure occurs before rushing a property to market. Creating a due diligence pack allows buyers to make a quick and informed decision and ensures you are not attracting offers with long due diligence and finance clauses due to unavailable information at the time.
The information to collect for a tenanted investments include:
– A copy of all the leases
– A copy of the lease renewals
– Rental ledgers
– A copy of all the outgoings (rates, building, water, insurance and any cost that the landlord incurs)
This will help buyers make an informed decision, speed up the sales process and ultimately create more comfort with the buyer.
4. Property Campaign Planning
There are only a few weeks in a year where launching or closing an expressions of interest campaign for commercial property is not recommended. That is the week before and after the financial year; the two weeks leading up to Christmas and the week after Christmas. Unlike residential property, where many transactions occur through these periods, commercial property or commercial property buyers rely heavily on lawyers and accountants, who are not as readily available to be a part of the transaction during these periods.
All these points are extremely important when releasing your commercial property to market, as even losing one or two buyers could be the key difference between making a premium and not.
We hope you have received some insights that will aid and assist your commercial real estate decision making processes. We look forward to bringing you more videos and updates from the Kollosche Commercial team.
If you have any concerns about your commercial asset during these times, feel free to reach out to Kollosche Commercial.