When most people think of real estate, they think of residential. And there is a huge residential real estate industry and infrastructure. But what do you do when you want to sell a commercial property? Although there are commercial brokers, the process and means of pricing, finding and matching a buyer can be more complex. From retail to farms, industrial buildings to vacant land zoned for business and much more, closing a deal on commercial real estate involves far more than selling a house. What should you do if you want to sell a commercial property? Where do you begin, how do you get the best price and a process that doesn’t get bogged down for months or longer? In some cases, the answer may be reaching out to a real estate investor who regularly buys properties across the category.
Real estate investors can provide a viable option for commercial real estate, funding deals with their own cash and using their expertise to manage everything from zoning to tax incentives. Handsome Homebuyer, one of the biggest real estate investors in the New York metro region, ranging from Nassau and Suffolk counties to much of New York City, has done a wide range of deals for commercial real estate. Here’s a primer on selling commercial real estate and why you may want to consider a real estate investor as a potential buyer, purchasing commercial real estate with cash rather than seeking mortgages.
Can I use comps to figure out what my commercial property worth?
With residential property, comps can help you figure out the value of your property. And it is possible to find comps for commercial property by tapping various websites. But there’s also a problem. Commercial buildings frequently are not as easy to compare to one another. Comps can leave you with at best a partial sense as to value, since each commercial property is different due to variables such as zoning. Instead, you may want to know what goes into calculating the value of commercial property.
How do I value a commercial property?
While comps may help valuing a house, it’s probably good to understand what goes into valuing a commercial property, which is valued by best use. That takes into various factors that together determine the value to a buyer.
Zoning. While the structure on a commercial property is important, the zoning can matter as much or even more. Zoning such as industrial or retail can determine what can be built there. It’s important to understand what can be built, not only what is there, is key in valuing commercial property.
Location. Where a property is located also is key, but what makes a commercial property valuable is different than what makes a residence valuable. Proximity to traffic is a drawback for residences, but a selling point for commercial property. Demand for a location also can boost value.
Environmental issues. Environmental problems can lower value, and limit buyers. Companies like Handsome Homebuyer have experience dealing with environmental remediation.
Taxes. Tax rates impact commercial property value, but so do tax incentives. It’s important to be up to date regarding incentives, if any, that are available. Handsome Homebuyer has resources to identify incentives that might be available to buyers.
Do I need to hire a professional realtor to sell?
You can sell commercial property on your own or with a broker with pluses on either approach.
Commercial real estate brokers. They bring some familiarity to these transactions ranging from paperwork to valuation. The commission is typically 6 percent of the sale price, although it can be split between a seller’s and buyer’s broker. Commercial agents, however, sometimes market listings to a smaller group.
Residential brokers. They can bring listing and marketing services, but typically aren’t as well informed regarding commercial properties. Owners can sell on their own, although finding a buyer can be complicated.
Do it yourself. Selling it yourself can be difficult, but working with a broker or selling on your own can work with a real estate investor. Real estate investors such as Handsome Homebuyer bring a deep expertise and in-house resources, working with those who sell on their own and brokers. Whichever route you take, a real estate investor may provide a willing and ready buyer at a price that you like.
How important is best use in selling commercial real estate?
Understanding best use is key when you sell commercial real estate, because you sell based on what is there and what can be built. Whether you use a broker or not, that’s a key concept.
Best use. The concept behind best use is the value a property has to businesses under zoning. While rezoning is sometimes possible, it can be uncertain. At Handsome Homebuyer, we do a great deal of commercial real estate business. We understand and can evaluate commercial real estate based on best use, taking into account factors from traffic to taxes and zoning.
How long does it take to sell my Commercial Property?
Selling commercial property is complex, and that can make it time consuming from paperwork to finding a purchaser.
Due diligence. This process can easily take months, far longer than with a house. Banks want paperwork and reassurances. Real estate investors like Handsome Homebuyer have in-house expertise to make the process go more quickly. This is our business: We have resources in-house.
Self-funding speeds the process. Whenever you deal with someone who needs a loan, you’re dealing with bureaucracy, which means delay. Since we self-fund, rather than working with a bank, we eliminate the bureaucracy that goes with a mortgage. That saves time and money. We have the cash and are looking to deploy it. That means we can go from desire to deal in a matter of weeks. Selling for cash means you get the cash sooner.
What are some types of buyers?
Identifying a potential buyer for a commercial property can take time. But there are various routes.
Businesses. You may look for similar businesses as commercial buyers. That can work out, but also may limit your scope. There may be many other ways to use the property. If you focus too narrowly, you can miss potential deals.
Neighbors as buyers. A company nearby may be looking to expand. So companies nearby can prove ideal buyers. It’s at least worthwhile reaching out, to see if someone nearby wants to move or grow into your facility.
Brokers and buyers. Commercial real estate brokers may have a network involving some buyers. That can work, but is likely to be limited. Residential brokers may list, but that system is designed primarily for the residential market.
Real estate investors as buyers. Handsome Homebuyer, a real estate investor, buys a wide range of commercial properties, so we can be a good match whether you have retail, industrial, a farm or others. We understand the process and know how to unlock the value of a property, benefiting the seller since it lets us increase the price we offer you.
Is it a good time now to sell commercial property?
Low interest rates make it a good time to sell and buy commercial property. But so do other factors. Some properties are hotter. Industrial is going strong. Retail is weaker. The economy has been expanding, despite inflation. That’s leading to growing demand. Handsome Homebuyer is always in the market for commercial properties. We have the cash, the competence and the expertise as we seek to give people a price and a process that works for them.
Why Handsome Homebuyer?
Commercial property deals can take time and require expertise, making real estate investors at least worth considering. Handsome Homebuyer brings experience, expertise and money to residential and commercial properties. The complexity of commercial property makes selling to a company like Handsome Homebuyer a potentially highly attractive path. We have the background to figure out best use, which can result in the best deal for you. And we have the resources to deal with complications, from environmental to zoning. Most important, though, we already have the money, so we don’t have to start a mortgage process. And since we do so many deals, we’re able to operate at lower margins than smaller companies. Our scale and specialization let us make offers based not just on what’s there, but on the sometimes hidden value of your property. If we unlock value, that lets us pay you more. And that can be best for you. If you’re looking to sell commercial property, consider reaching out to Handsome Homebuyer. You might find a price and a process that works for you.
Commercial properties purchased
The following are a few of the commercial properties we’ve bought in the Riverhead and Eastern Suffolk area.