You want to sell your tenanted commercial property that produces a good and dependable revenue flow. What's the problem? With good planning, smart management and clear and sensitive communication there may be no problems. But, handled without careful thought and considerations, circumstances can escalate into a financial hardship and a tough sell.
To begin, tenanted Commercial property that houses business operations has very different challenges than tenanted Commercial property housing residents! And both of those are vastly different than offering vacant commercial property for sale. While some of the pragmatic challenges may be similar, the dynamics and the "emotional impacts" differ in all scenarios.
Tenants? You gotta love 'em! And, you need them to love you back – especially if they hear the news that your property is for sale, and they didn't hear it from you! Personal security at rented or leased commercial business property, or in rented or leased commercial residential property, is uppermost in any tenant's mind. So, a covert decision by the landlord, learned from others, can mistakenly and negatively motivate tenants. All the questions pop up – and some will cause your tenants to decide not to gamble on their security, but to get out while the getting is good, possibly destabilizing your plans.
It's long since been proven that "the grapevine" is the most efficient means of communication! There is nothing quite like rumors to get a ball rolling in the wrong direction. How you first approach sharing your intentions to sell your tenanted commercial property will drive how much you can control for a healthy, profitable transition.
Let's take a look at good ways to begin. Your Commercial real estate agent knows the sensible and profitable approaches, as well as some techniques that can keep your tenants stable, in the information loop, and panic-free.
It is sensible to be discreet about your intentions until you and your Commercial real estate agent have decided on the best strategy for your circumstances. There are many excellent options.
You may want to clear your commercial property of poorly performing tenants. It might be a good idea to revise and extend stable leases in order to present a property for sale that has clear projections and dependable returns for a new owner. Handling and resolving management problems, before showcasing to prospective buyers, can only help. Review staffing if you are the owner-operator, and consider refreshing hires and acting on possibly overdue repairs and changes.
Poor physical condition of the commercial property in question can only work against you. Disgruntled tenants can be very forthcoming about chronically ignored utility complaints and other functional issues. Such problems revealed can surely drive down perceived value and inspire challenges about the asking price. Walking through a facility and observing worried, discontented employees, is a poker player's tell!
On the other hand, a prospective buyer looking for an up and running Commercial enterprise and observing good-natured business employees, good management, congenial residential unit tenants and ship-shape facilities is truly a prospective buyer!
Most of the challenge in selling tenanted commercial property is about good people management under stressed conditions. There's a lot more to this aspect, and I will be returning to this focus in future articles. Meanwhile, let an experienced and professional Commercial real estate agent help you jump through the hoops and make selling your Commercial property an enjoyable and educational experience!
Jim Magliulo is the leading Commercial Real Estate Agent in Lake County. He has been the company's Sales Agent of the Year for 5 years and holds the Lake County record for the highest total sales volume in one year for a non-broker agent. He can be reached at County Air Commercial at 707-263-5729, at jim@countryair.com, or at www.CountryAirCommercial.com Send Jim your email address if you would like to be notified of new commercial listing in Lake County.
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