You are ready to list your commercial property for sale. When you bought this property you researched the investment thoroughly. And now, you think the time is right to list your commercial property.
List Commercial Property For Sale
Investing in commercial real estate can be a great way to grow wealth, but it can be difficult for owners to find the right buyers for their multi-million dollar properties. You have to be able to list your commercial property at a price that earns you a profit.
Over the last 19 years, the team at MANSARD has become experts in high-value commercial real estate sales in Massachusetts and New Hampshire, negotiating the sale of more than 1,000 properties for our clients, which made MANSARD one of Boston Business Journal’s largest selling commercial real estate brokerages in Massachusetts in 2018. That’s why clients trust MANSARD with their growing portfolios as they buy and sell multiple properties over time.
Check out these signs that it’s time to list your commercial property for sale. We’ve put together 6 reasons for you to consider selling commercial property.
6 Signs It’s Time To List Your Commercial Property:
1. Negative Cash Flow
“I have negative cash flow and need to sell.”
MANSARD had a client purchase a property for his company. Shortly thereafter, his company was sold off and the building went vacant. It costs him $17,000 a month to own this property because he hadn’t been able to re-tenant it. One of the biggest signs it’s time to list commercial property for sale is when you’re losing money consistently.
The pain of having to cut a check every month to pay a lender, the tax bill, the insurance bill, the snow plowing, landscaping, the utilities, fixing the roof when there’s no one in the building, is all so painful. You’re just watching your money run out the door. It’s not coming back.
Every month that goes by, you have more and more invested in the property. It just keeps growing.
Your basis just grows. You must put a stop to it. The only way to stop the negative cash flow is to list your commercial property for sale. Sell it to someone else who can use the property in a different way. Sell it to someone who can afford to pay for it the way they are going to use it.
The realization comes when you’ve written six checks in six months and you’re thinking: “This isn’t going to end anytime soon. I have to list this commercial property for sale because it’s just going to cost me money.”
MANSARD once sold a half a million square foot industrial property on behalf of an owner. They knew a year ahead of time that their tenant was going to vacate half the property. They knew when the tenant left it would be extremely difficult to replace them. The owner was going to run a $70,000 a month loss every month. That’s $840,000 in a year just to own a property.
The owner wondered how they were going to get out of this situation. They foresaw a negative cash flow if they didn’t do anything. They needed to list the commercial property before that happened. MANSARD helped the owner do just that.
We structured a sale, exposed it to the market, and it sold within 60 days. We closed on it 4-5 months before the tenants left. The property owner got their money out. Someone else purchased the property who would use it for their company. It made sense to sell. Win-win.
The purpose of investment properties is to make money. If an investment property proves it’s not profitable, listen and move on. If you can relate to these scenarios, you should list your commercial property for sale due to negative cash flow:
- High turnover rates can eat away your profit. Empty space instantly cuts your incoming cash flow for the duration of the vacancy, a sign to list commercial property for sale.
- You’re paying additional costs to advertise the space and run background and credit checks on tenants.
- When you account for the value of your time spent promoting, showing, and handling leasing tasks to rent out vacant space, you realize you could be investing that time elsewhere to earn a profit.
Even if your investment property is full, you may have a negative cash flow depending on the market. It’s time to list your commercial property, if you can’t charge high enough rent to cover your loan, insurance, taxes, maintenance, and other costs. Sometimes you can correct that negative cash flow by reducing your expenses or raising the rent. If you can’t find a way to make the rental profitable, the sooner you sell your commercial property, the lower the losses.
An Expert Commercial Real Estate Broker In An Outstanding Brokerage Agency
I’m Jeremy Cyrier, CCIM and since 2001, I’ve negotiated the successful sale of more than 1,000 properties for my clients, which makes my team one of the most successful selling commercial real estate brokerages in Massachusetts per the Boston Business Journal. Over that time, I’ve honed my skills to get my sellers the deal they want by marketing their properties as if they were my own. I know the local markets and what buyers want. That’s why over 81% of our business is repeat or referral clients.
Your commercial real estate is valuable not only to you as its current owner, but to the community, and to its next owner. My mission is to find the right buyer, who will pay the most, close on time, and keep issues in check to get the deal done, all while providing you with a smooth transition of ownership. My clients have gotten their agreed-upon sale price and on-time closings in 88.9% of cases.
2. Major Life Event
“I sold, closed, or moved my business and need to list my commercial real estate for sale.”
You sold the company, and the new owner wasn’t interested in the building. They may have signed a lease, but face it—you are now a real estate landlord. You have a company leasing a building from you that you still own.
Often, we find owners hold rather than list commercial property even when cash flows from them for a number of years. At some point, they realize that it’s time to finish the disposition. They started it when they sold the company, and it’s time to finish it off by listing their commercial property.
Or maybe you sold the company. The company closed the operation and folded into an existing operation somewhere else, and you now have a vacancy. The company that purchased your company didn’t want the building. Now you must make two sales. One in business. One in real estate.
You sold off the company, and now it’s time to list your commercial property. It’s a left-over asset that needs to be disposed of.
Remaining profitable requires more income than expenses, but sometimes those expenses are out of your control. A local property tax hike can suddenly increase your costs just to own the property, a clear sign to consider listing your commercial property for sale. An increase in insurance premiums has the same effect.
Pay attention to legislation in your area that could affect your costs. Monitor your costs of owning the investment property regularly. If you can’t overcome a sudden increase in expenses, you may be better off listing your commercial property for sale.
Strengthen CRE Investments with MANSARD’s Complimentary Real Estate Guide:
- What is the cost recovery recapture tax and what does it mean for you?
- What’s the difference? Long term vs. short term capital gains tax.
- How much will you owe? Calculating your tax liability upon sale.
- Can you avoid taxes? Tax deferral planning using the 1031 exchange.
Get these answers and more from MANSARD’s complimentary real estate guide.
3. More Frustrations Than Satisfaction
“I’m tired of managing the property.”
You’re dealing with ongoing repairs and maintenance, coordinating with vendors, and you’re dealing with difficult tenants. You have capital expenditures that are financial drains on you, and you want to get out now and list your commercial property for sale.
You’ve owned the property for a long time, and you just don’t want to operate it anymore. Hiring a property manager isn’t going to solve this for you. It’s more about being responsible for the property than it is about managing it. You can hire a property manager, but that doesn’t stop you from being responsible for the property.
You want to move on and list the commercial property. Often, we’ll have this conversation with the owner going through this.
They’ll say, “I’m tired of dealing with it. I’m tired of dealing with the property.”
We ask them, “Well, why not hire a property manager?”
Hiring a property manager is an owner decision, not a seller decision. A seller sounds like, “I don’t want to hire a property manager; I already had a property manager. This property is just too complicated.”
A property manager is not going to solve the problem you are facing. Making this hire only slightly reduces the problem. You are still responsible for the property. Some people are just done and ready to list commercial property. You don’t want to be responsible for it. It’s time to list the commercial property for sale.
A property MANSARD represented in Bedford, MA involved an owner who had a property manager on two separate occasions. He said the property has become too hard. It was more than he wanted to deal with. He was tired of it being his responsibility.
That’s the key. You’re tired of being responsible for the property, tired of dealing with the property, tired of managing the property. Let it be someone else’s responsibility. Let them squeeze some money out of it. List your commercial property for sale with an excellent commercial real estate brokerage and explore different investment options that relieve this stress.
4. Significant Increase In Property Value
“I’ve grown the property to what I think to be its full potential and I’m ready to list my commercial property.”
You’ve taken the property as far as you’re going to take it, in terms of its potential. You may list commercial property knowing it will grow more than what it is for someone else. That may happen. It probably will happen.
But where you are today, you hit the point where you’re satisfied. You’ve hit the “I’m satisfied” level of the property. This isn’t about, “I’ve made all the money and no one else is ever going to make money on this property again.”
You are not going to be the one to tear this property down.
You’ve reached what you believe to be the full potential of your profit.
At the end of the day, no one owns anything, we just control it. Under your period of control, you’ve grown the property as far as it’s going to go. You’re just not going to get much more out of it. You’re ready to pass it on to the next person and list the commercial property for sale. Let them bring their energy and take it from here.
You’re satisfied. You’re ready to list your commercial property.
The real estate market constantly shifts, and that includes the value of your property. If you bought the building at a bargain, keep an eye on the market to see how it changes. The goal is to list commercial property for sale when its value is high, especially if you’ve been considering selling anyway. It can be challenging for owners to find the right buyers for their multi-million dollar property. MANSARD brokers are ready to connect you to an extensive network of buyers and investors.
5. Investor Returns
“Investors are pressuring me for their returns.”
You’ve gone out, you’ve raised money, you found partners, they’ve put capital in, and they’ve committed the money for the 3-5-7-10 years. They’re invested. It’s still liquid, and they are getting distributions out of the investments so that they get checks monthly.
Now the investors are saying, “It’s been several years, that’s how long you said you’d have the capital invested, there’s been some growth in the property, we’re ready for you to list the commercial property, and we’re ready to get our initial investment back plus our profit.”
It’s time for you to return the capital. They want you to list the commercial property. Realize the gain and distribute it back to them. That’s it.
Other market changes may also inspire you to list commercial property for sale. If there’s a large demand for the type of property you own, it may be a good time to sell. The demand can decrease suddenly and make it easier to list commercial property for sale.
If several similar property types are going on the market, you may want to act now. MANSARD is a top commercial real estate company with experts who can help you determine market timing. If the market gets flooded with similar properties, listing commercial property becomes more difficult.
6. Shift In Investment Goals
“I want to list commercial property and leaseback to generate cash to grow my business.”
Why do people want to list commercial property and leaseback?
One reason, you want to raise capital to grow your company. The money that you invested in your business is going to grow faster than the money that you’re going to invest in your real estate.
It doesn’t make sense to keep your money invested in your real estate because it’s keeping you from growing your company. Take Reading Corporative Bank for example. It had bank branches that they owned free and clear. One of the things they wanted to do was reposition the balance sheets, so they moved equity out of the breaking order by leasing the locations back for ten years.
MANSARD listed the commercial property exclusively and sold the branches privately, so the sale wasn’t publicly available for their customers to know. Reading Corporative Bank was afraid that there would be a run on the bank, that people would think the bank was going out of business and that they were selling off, which wasn’t the case.
MANSARD guided this process for Reading by privately marketing the opportunity and received seven offers. RCB took the money out of the properties and flipped that for cash. When they increased their cash holdings, Reading Corporative Bank was able to increase the lending, which meant they had more money to complete acquisitions.
Reading found they could grow the bank faster by not being in the real estate ownership business. This is a great example of why you want to list commercial property and leaseback your property.
Your real estate investment goals are likely to change over time. If your current properties don’t match your new goals, it may be time to switch gears.
You may be ready to list your commercial property for sale and change in one of the following ways:
- Move into a new type of commercial property market
- Invest more capital into your preferred property type
- Sell your commercial real estate to move in a new investment direction
Say you started out owning a small retail location. You’re now interested in moving to strip mall ownership or multifamily dwellings. Maybe you’re heading toward industrial or office property ownership.
Listing commercial property for sale frees up capital to invest in your new preferred property type. You may want to sell and leaseback your property to generate cash and grow your business. Instead of dragging along an old property that no longer fits your vision, you can focus on a new direction for your business.
You may decide to take your investment strategy in a completely different direction, leaving real estate behind. If you list commercial property for sale, you can invest your profits elsewhere.
List Your Commercial Property With MANSARD
If you can relate to any one of these examples, then it’s time to talk with MANSARD and sell your commercial investment real estate with confidence. Maybe you’ve determined that you’ve grown your investment property to its full potential. Or, maybe your investment property is simply more trouble than it’s worth. Now is the time to list your commercial property. Whether you’re tired of being a landlord or other factors are influencing the decision, listing your commercial property for sale at the right time can prevent you from losing money. You may even turn a larger profit by taking action sooner than later.
Sell Your Commercial Investment Real Estate With Confidence
- Discovery. We want to know everything about your property and goals so we can match you with the right buyer who will pay the most, close on time, and keep issues in check to get the deal done.
- Evaluation. We create a thorough plan to sell your property, and share it with you. We market your property until the day of the closing. You’re never in the dark with MANSARD.
- Exposure. We’ll keep you informed while we aggressively market your property— publicly or privately— using our 42-point proprietary sales process to help you make a smart deal.
- Celebration. 88.9% of MANSARD deals close on time at the seller’s accepted offer price. That means less hassle, lower stress, and more celebrating.
Ready to get started?
Schedule a free consultation with our team of experts to learn more. We’ll discuss real-time commercial real estate market opportunities and help you determine the best investment strategy for your portfolio.
Frequently Asked Questions about Top Commercial Real Estate Companies
I am a Certified Commercial Investment Member (CCIM). The certification is designated for those recognized as experts in the disciplines of commercial and investment real estate. With over 19 years of successful experience as a broker, I have brokered the sale of over 1,000 properties.
I utilize a variety of strategies to bring buyers to the deal. I have access to a strong and vast network of industry professionals. I have relationships with buyers and others who refer clients to me. Additionally, I use LoopNet, MLS and Costar and other online resources.
We are commercial property agents and do not provide legal advice. We do, however, work with skilled and experienced real estate attorneys and seek their counsel as necessary.
Commercial property brokers need information from their clients. For example, a commercial broker will ask their clients to provide important details about the history of the property and other facts crucial to its sale. Open and responsive communication makes selling a commercial property much easier.
The length of time it takes to sell a property is dependent upon many factors, like the amount of due diligence required to get the property ready to sell. A sale typically averages 6-12 months in the bidding process.
A 1031 exchange is a swap of one investment property for another that allows capital gains taxes to be deferred.
Your broker will consider many factors such as the location of your property, the year it was built, the type of property, and the size of the property. Your broker should be taking a market approach, which means they are looking at recent sales of other properties that match many of the characteristics of your commercial property to determine the sale price.
Properties are broken down into three classifications. Each property classification reflects a different risk and return because properties are graded according to a combination of geographical and physical characteristics. These letter grades are assigned to properties after considering factors such as age of the property, location of the property, tenant income levels, growth prospects, appreciation, amenities, and rental income. There is no precise formula that dictates which properties are placed into which class. Grade A space is the most expensive and presents the least amount of risk. Conversely, Grade C is the least expensive but has the most amount of risk. In most instances, it would be cost prohibitive to try and invest enough money into your property for the purpose of moving it up a grade.
There are important benefits to working with a commercial property broker. An experienced and astute broker will have strong relationships with other industry professionals to help locate buyers, will thoroughly understand market trends, and has tried and true marketing techniques and resources.
Agents get paid by the property owners via commission. An agent’s commission does not affect the purchase price.