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SELL & LEASE YOUR COMMERCIAL REAL ESTATE FOR THE MAXIMUM PRICE

In my experience as an owner/landlord and broker of commercial real estate (“CRE”), most brokers hired to list office, retail, industrial or other types of CRE properties for sale or lease put up a “for sale” or “for lease” sign and list a property online at a couple of Commercial Real Estate (“CRE”) websites like Loopnet and CoStar.  This passive approach waits for the interested parties to find the property by driving by it or searching for it online.

The passive approach discussed above, while necessary, is not the best way to sell or lease your property for the maximum price and/or fast as possible as it takes the least amount of effort by the broker.  In some hot CRE markets with lots of demand and limited supply, this might be all that is required. However, even then you aren’t seeing all offers and might not be selling or leasing for the highest price or as fast as you could have.  In conjunction with this passive approach, there are many other meaningful actions that can be performed but they take the knowledge that most brokers don’t have as well as time, energy and dollars that these brokers simply don’t want to invest.

One such action a broker can take is contacting your current client base (via LinkedIn, email, phone call, etc.) and even your personal contacts (via Facebook, Twitter, etc.) to see if they have any interest or know of anyone that does.  The power of these contacts is not to be underestimated especially if you have strong business and/or personal relationships and have kept in touch with them. I have found the more personable broker that has a reputation for putting people first over making commissions and that specialize in certain cities or certain parts of larger cities know the local people that actually live and work in these areas. This helps them get more referrals to help them sell their listed properties faster.  I recently received an office lease listing where a large national brokerage firm could not lease the space for 2 years but I was able to lease it in less than 30 days because of the aforementioned personal relationships and referrals to me from them.

Another action a broker can take is changing up the listing and flyer information periodically.  I prefer doing this monthly but it does depend upon the property type and demand for it but at a minimum, I would recommend doing this quarterly.  I recommend changing the listing and flyer to highlight different important property features and use different headers so interested parties that might have seen the original marketing information see new information that they might not have seen the first time.  I recently received a new office lease listing that a large regional brokerage had tried to lease the space for years where the listing, flyer and other marketing information simply was never changed and I was able to make it better and have created new interest in the property with multiple offers coming in now.

To reiterate, there are many other actions a broker can take to help his client sell or lease their CRE for a higher price and/or faster but many brokers simply lack the knowledge, don’t want to invest the time (they might work for a big brokerage and be focused on volume rather than quality), don’t want to pay more for different listings other than what their company has access to, don’t have a good reputation, etc.  And these are areas I have overcome as both an owner/landlord and broker for CRE and I can help you sell or lease your property in a better way.

If you have questions about selling, buying, or leasing CRE or have any other CRE needs, please contact David Massie at david@djmcre.com or 805-217-0791.

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Commercial Landlords In California Facing Potential Large Property Tax Increases

California commercial landlords, owners of office, medical, retail, warehouse/industrial spaces and more, are in for a shock if the current proposition on the ballot passes in November.

In a recent Bisnow article, Rex Hime states: 

“If this comes into effect, they [small businesses] are gone,” Hime said to Bisnow after his presentation during the ICSC Southern California Idea Exchange event Thursday at the Long Beach Convention Center. “The second issue is, you have these large corporate property owners with many, many tenants, and since most are under triple net leases, they are going to pass that tax along to their tenants, and some of them will not be able to survive.”

But what Hime doesn’t state is that this will not just adversely affect retail landlords but all commercial landlords who own commercial properties of any type.  It’s not just retail leases that pass through the cost of property tax increases.  Office and industrial leases usually do it also even though they are modified gross leases and not triple net.

Also, how will these potential tax increases affect commercial real estate prices?  I think it will cause sales prices to drop.

The commercial real estate market in California, and also nationwide across the US, has been doing very well for the past decade with prices at all-time highs with no real end in sight as of now. But if this initiative passes in CA and it causes prices to drop and vacancies to increase as predicted, California is in for some serious financial pain.

And those owners/landlords who bought at high prices in the past decade won’t like it much if this initiative causes prices to fall and vacancies to increase. This will probably also lead to more bankruptcies and foreclosures because of loan defaults.

If you want help with leasing, buying or selling your commercial real estate, whether office, medical, dental, retail or warehouse/industrial space, contact David Massie of DJM Commercial Real Estate at david@djmcre.com or 805-217-0791.  

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More Medical Tenants Leasing At Retail Locations.

In 2017, I had written a blog predicting that medical leasing in a retail center would be beneficial, and more prevalent in the future. This prediction has recently come true, as there is, in fact, a shortage of medical space available.

Bisnow article on the matter states:

“In the last three years, we [retail brokers] have done more medical deals in retail spaces than I have ever done previously in my career,” Franks said. “Additionally, we have done more specialty retail uses in traditional retail space than we ever have done before.”

From my previous blog on the topic, I stated that it would not only be good for a landlord to capture medical tenants and bring in potential new business for the other retail tenants in the center but also that it may bring in new patients for the medical tenants as well.

However, the main problem for medical tenants leasing at retail centers, particularly nice ones where they probably want to be most, is that the rent is usually higher than a nice medical building. Retail landlords don’t typically pay for the medical improvements needed for leased space as a medical building landlord would. Because of this, the medical tenant usually takes the cheaper way out and leases at a medical building. But what if leasing at the more expensive retail center brought in more income because of the retail exposure? If it more than covered the extra costs for rent and improvements, it should make it worth doing.

If you want help with leasing, buying or selling your commercial real estate, whether office, medical, dental, retail or warehouse/industrial space, contact David Massie of DJM Commercial Real Estate at david@djmcre.com or 805-217-0791.