When you have met with the commercial real estate prospect you’ll have a reasonable understanding of their needs and demands. At this point you need to understand whether you really want to work for them and take on the listing.
What to Consider?
You will now need to consider the attractiveness of the property and its liquidity factor to buyers. Most particularly the liquidity factor is the ability to move the property quickly in the current market. To achieve this awareness, ask yourself the following questions –
- Are the tenants in the property attractive to an incoming purchaser?
- Are the leases in the property supportive of rental growth and opportunity?
- Are the leases in the property professionally prepared by a solicitor and registered on the title?
- Is the property located in an area where tenants want to be located?
- What do the neighbours think of the existing property?
- What rental types and levels of rental are acceptable in the market and does this property provide them?
- What comparable properties existing in the area and remain unsold or vacant?
- What is the future of the other developments in the area and is there an abundance of development land nearby which will soften the potential price you can achieve?
- What are the supply and demand factors for lettable space in the region?
- What is the history of the property and the building?
- Are there any environmental issues that can jeopardise the sale?
- Has the building been on the market before and if so for how long and at what price or method of sale?
- How would you best market the existing property given the business sentiment and environmental and economic conditions?
- What is the best time of year to sell the property?
- Are there any vacancy factors or short term leases in the property which need to be rectified before moving towards sale?
- Given the current building, what is its future life cycle and who will therefore be attracted to the building in its potential sale?
- What is the best way to sell the building in a timely fashion that will achieve the best price?
- What amount of vendor advertising will you need to impact the market?
- What is the existing time on market for current sales stock?
- Have you been able to fully inspect the property and the precinct to completely understand what you are dealing with?
- Have you identified and inspected all property documentation including leases, and titles that are relevant to the property selling?
- Are there any existing incentives with the current leases on the property which will need to be handled and extinguished as part of the sale settlement?
- What is the target market for the property?
- Do the leases for current tenants generate any weaknesses for the sale?
- Are there any encumbrances on the property or in the region that impact the property in any way?
Given all of these issues, you will be able to establish a reasonable opinion as to the saleability of the property. The most important question you then need to satisfy his whether you really want the listing. Can you see that the listing will really sell? Do not waste time on stale or unsaleable stock.