How to Find Commercial Real Estate Buyers
From skyscrapers to triplexes, commercial real estate investors purchase properties to satisfy individual and company investment goals. However, "whether you're extending your business to include a commercial division or starting out in the commercial market as a rookie salesperson, there aren't any shortcuts in selling commercial real estate," warns Chris Leporini of Realtor Mag. Finding buyers is a key component in executing an effective exit strategy for your investment. Plan the sale of your commercial real estate property by locating commercial real estate investors in advance of placing your property on the market.
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Instructions
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Create a marketing plan for your property. Consider the property use type (e.g. industrial, office, retail), price per square foot, monthly income and price of the commercial property you want to sell. You must have a clear understanding of your property's perks so that you know the best type of buyer to pursue for your deal. Investors and investment groups typically have a focus area and invest only in properties within this area. Compare your property's features with like properties in the area by researching newspaper "for sale" listings and by visiting an online resource such as Cityfeet.com or Loopnet.com. When networking with other investors, you can discuss the competitive advantages of your property over other properties on the market.
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Create a listing for your property using its key features. Post your listing on the online commercial real estate classifieds websites you used in Step 1. For deals $5 million and above, consider approaching investment firms in your city with your real estate deal. These firms manage funds that specialize in purchasing assets that meet specific criteria. This criteria is sometimes listed on the company's website, but networking at local commercial real estate functions will increase your chances of getting in front of a fund manager. Organizations such as CoreNET, the Urban Land Institute, and NAIOP host monthly industry meetings that are open to members and non-members (for a fee). Attend the events to collect business cards and make contact with potential buyers.
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Read newspaper clippings. Large dollar transactions in real estate are often listed in the business or real estate section of your newspaper. If your city has a business journal, there may even be a section dedicated exclusively to commercial real estate. Review articles on recent transactions and make a list of the individuals and firms involved in the sale. Note the types of properties being exchanged and how your property matches up. Contact buyers in the articles who purchase properties similar to your own.
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Hire a broker who specializes in your property type to round off your efforts. Choose a broker that is a Certified Commercial Investment Member (CCIM). The CCIM Institute offers a widely recognized advanced certification process for commercial real estate professionals. A certified broker will have extensive knowledge that will help you structure your deal so that it is attractive to a wider range of buyers. Attend CCIM chapter meetings to find a broker and, while you're there, meet other commercial real estate investors.
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Tips & Warnings
Commercial real estate organization membership offers you the invaluable benefit of meeting other professionals in your industry while learning about industry protocol and opportunities.
Be patient. Once you identify a buyer, it can take a year or longer to close depending on the size of your deal.
References
Resources
- Photo Credit skyscraper image by maya from Fotolia.com
