A husband and wife had successfully sold their water purification company to a publicly traded entity. Thrilled to be out of the business, they still owned the 26,000 SF industrial building that housed the company. Their constant worry kept them awake at night, wondering what might go wrong with the building and how they might go about selling their commercial real estate.
Brought in to sell the building, we reviewed their prior profit and loss statements. As nervous landlords, they were over-maintaining the building and booking capital and operating expenses that were billable to the tenant as landlord operating expenses – reducing their net operating income. Their financial statements were reliable, but they were not in the form that a buyer or a lender would consider attractive, particularly at the target selling value for the commercial real estate property
After normalizing the financial statements, we created a representation that the landlord’s rights to bill the tenant per the lease supported, while also showing a lender what an accurate flow through of the property’s net income should be. This revision allowed us to generate five offers on the property, within the seller’s target price range and 25% in excess of the appraisal they had completed the prior year.
Watch to discover this tip for selling your commercial real estate for the right price.
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