By Gary Tasman
The Southwest Florida commercial real estate market is white-hot, and many property owners are hoping to take advantage of high values by selling their assets. While some buildings and land will be snapped up quickly by eager buyers, other properties are likely to languish on the market for months—or even longer—with little interest from potential investors.
When a property is lingering on the market, it’s time for the broker and property owner to have a potentially uncomfortable conversation about the causes. Generally speaking, there are four reasons why your commercial property isn’t selling.
It’s not priced to sell at market value.
Properties can have many different “values.” Insurance value, estate value, tax value, and market value are all different and can vary significantly. A property’s market value, simply put, is the amount that a willing seller would accept, and a willing buyer would pay, given proper time and exposure.
Market value is a moving target, changing based on the supply of properties on the market, economic conditions, the property’s features and benefits, and numerous other factors. A reliable broker uses local data and trends, combined with research and experience, to assess the market value of a property and position it to sell.
People don’t know it’s for sale.
Price and positioning are the two most important variables when it comes to selling a property. More than half the properties that don’t sell in any given market either aren’t priced or positioned correctly. If you’re priced at market value but your property isn’t moving, that means potential buyers may not be aware of it. Awareness is a large part of positioning. Your broker isn’t just responsible for making sure people see your property — they’re also responsible to make sure the right people see your property.
In other words, you probably won’t succeed if you just drop a “For Sale” sign on your property or list it online and wait for a sale to happen. Your broker should have a vision of your ideal buyer, and use their sphere of influence to ensure they know about your property. Brokerages like Cushman & Wakefield | Commercial Property Southwest Florida have relationships in every sector of the commercial real estate market and are ready to position your property for maximum exposure to its most likely buyers.
The property isn’t in ideal condition.
Regardless of whether you’re selling property or land, the condition of your property is vital, and not just because you want to make a good first impression. The only reason people buy investment property is because they believe it will be worth more in the future than it is today. If an investor believes they’ll need to make a large capital infusion in your property to make it profitable, they’re likely to pass on it.
To prevent buyers from worrying about your property’s condition, you need to show it in the best condition possible for its market. While this may produce short-term expenses, it will also reduce the investment risk for buyers. Property investors will recognize its long-term potential for higher lease rates and lower capital expenditures, increasing your market demand and likely offsetting your costs.
You’re not truly motivated to sell.
Real estate brokers define a “good listing” as one with a motivated seller. Ask yourself why you want to sell, and how important it is for you to rid yourself of this property. Perhaps you’re selling because of a life change, a new opportunity, a tax-efficiency strategy, a need for renovation, or even just a hunch that the market is about to take a turn. The level of a seller’s motivation is often closely tied to the ease a broker has in listing and selling a property.
This is where the conversation between broker and seller can get uncomfortable. If it’s important for you to sell quickly and break free from the property, you may need to be more flexible. Determined sellers are often more willing to negotiate on price and more flexible in the sale terms they offer. They understand the fluidity of the market and are prepared to listen to the advice of their broker.
If you’re not motivated to sell your property quickly, consider why you want to sell your property at all. You may want to consider another strategy. Full service commercial real estate agencies like Cushman & Wakefield | Commercial Property Southwest Florida have experience in leasing, property management, facility maintenance, and financing, and can help you determine the best tactics for producing revenue from your commercial property.
Whether it’s time for you to sell, or you’re just considering your options in our current commercial real estate market, the commercial property experts at Cushman & Wakefield | Commercial Property Southwest Florida have the knowledge, data, and resources to determine the best strategy for you. Contact us by calling 239-489-3600 or reach us using the form below.
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