What is the process for selling commercial property?
Similar to a leasing assignment, the sale of a property or portfolio of properties faces its own unique challenges and opportunities. As such, AGM Commercial creates a customized marketing plan designed to identify and seek out the most appropriate purchasers. Our belief is that finding these prospects creates the greatest opportunity to realize the highest possible value for a given asset. That being said, there are several steps that the professionals at AGM Commercial go through to ensure a property is marketed as effectively as possible.
Similar to our first step when engaged to lease a building, the first question we ask any potential client is: “what are your goals?” Some of our clients simply want to have their buildings sell as quickly as possible, and it is of secondary importance to get the highest possible price. Others (most) are hoping to generate the highest possible price and are willing to be patient to achieve those ends. We give our clients an honest assessment of what we believe the property is worth on the market, and what costs or repairs they will need to bear in order to achieve those values. One thing AGM Commercial will not do is simply take a listing to gain exposure for ourselves. We will not promise an unobtainable number. Doing so, in our experience, ends up with a frustrated client due to providing unrealistic expectations.
Once a value is determined and our client is aware of the repairs, if any, that will be needed to create the highest possible value, AGM Commercial goes about gathering as much relevant information as possible to help us market the property. Again, like our leasing assignments, we look into things that allow us to differentiate the property or properties that we represent. Rather than using common phrases such as “newly-renovated lobby” or “high-end finishes”, AGM Commercial prefers to notate items such as “new dual-station fed, dual-entry, redundant power supply and diverse entry points for data and telephone communication have been installed.” Providing specific, actionable information for prospective purchasers has proven to enhance the perceived value of the properties of our clients.
In terms of getting the message out, some of the techniques we use are proprietary. However, a general overview of some of the primary items we use include the use of broker and internet databases similar to multiple list services used for homes, cooperating broker email alerts, targeted user and investor prospect email notifications and door-to-door canvassing. Our proprietary in-house databases allow us to notify prospective users based on their location, size, and current lease expiration. Likewise, we are able to identify investors based on specific criteria such as product type, market, and investment objectives.
Once a prospective purchaser is identified, AGM Commercial helps the sellers coordinate the various studies that the purchaser will typically undertake. By remaining involved in the process, we are typically able to address concerns as they come up rather than let them build up to the point of potentially ruining the transaction.
By not only working hard, but working smart and investing the time and energy on the front end of a sales assignment, AGM Commercial is able to best position our client’s properties to be exposed to the most qualified leads and have the best possible opportunity to successfully sell their building in a manner that accomplishes their goals.
How long does the process typically take?
Unfortunately, there is no typical time-frame that can be given for how long it takes. There are factors that impact the time it will take. The biggest influencing factor is if the property is priced correctly. Occasionally, an owner will hear third-hand information about a sale nearby, and instantly believe their property to be worth significantly more than it actually is worth. They are not aware of various factors, such as what is the income stream coming from the property and how stable is that income stream. What we have found is that when we give a potential seller a price range, if they are willing to accept a value in the lower end of the range the property will typically sell quickly, whereas to get the top of the market value can often take several months of value-building and prospecting. To give a general idea, a quick sale would happen within about four months, from listing to closing (although it can happen more quickly), and a longer process can stretch to a year or more.
Can AGM Commercial help me value my property?
Not only can we help you value the property, it is the single most important thing we can do in the sales process. The professionals at AGM Commercial all firmly believe that even with the best marketing, upkeep, and methodology, an incorrectly-priced building will simply not sell. The market is always brutally honest, and often a building that won’t sell is strictly due to unrealistic expectations of the seller.
To ensure that we price the property correctly, AGM Commercial does more than typically is done. We will obviously look at comparable buildings that have sold in a given market and submarket. However, even for a building which a user would typically purchase, AGM Commercial goes further and completes an investment analysis proposition. After all, what could be more valuable to a seller than to understand the decision-making process of the potential purchaser? By comparing and combining these two valuation methodologies, AGM typically is able to arrive at the highest, but realistic value at which the property will sell.
Can AGM Commercial help me draft legal documents to complete the purchase?
Unfortunately, AGM Commercial’s professionals can only provide examples of documents that may be helpful for the purpose of understanding various parts of the transaction. An attorney is highly recommended for the drafting of legal documents.