There is more to selling commercial property than putting up a For Sale board and following the top tips can save effort, time and money.
Stockport based Fairhurst Estates have over fifteen years experience in dealing with the commercial property market and are happy to share some of their experience with fellow businesses.
Jonathan Hyde, Head of Building at Fairhurst Estates, explains further:
When making the most of property portfolios, it is vital to have a clear strategic vision.
This is true of all property income; from lets and securing the most favourable lease terms to choosing the most suitable tenants. It is equally true of selling a property to release the capital held in it. If you decide to dispose of a property through sale, there is plenty to think about if you want to get the best value, from managing the sale within an appropriate timescale, to considering how the sale impacts on your wider portfolio”
Top five steps to consider when it comes to selling commercial property.
1. Choose the right property
Appreciating that this can be a careful balancing act, it is important to highlight that highest value property in a portfolio will more than likely be the one that generates the most income, therefore selling may not make the most financial sense in the long run. On the other hand, any properties which have proven to be hard to lease or in need of upgrading may be difficult to sell. At this point it is vital to take a strategic view of the whole portfolio and weigh up short term capital gains against the longer-term income.
2. Make a decision on occupancy
If there are existing tenants in the property that is in question for sale, then the decision on occupancy has to be made. There are two options, sell with occupants in place, or sell as vacant possession? Both have their compromises as Stockport based Fairhurst Estates demonstrate: selling with tenants in place can be beneficial if the property is set to market to other investors, however all the correct documentation for occupancy and can present the income from rents over several years. Tenants that leave because of the sale need to be able to show potential buyers that this is an exception. If the property is in line to market for owner occupancy or redevelopment (see more) then negotiations to end the lease remains with existing tenants.
Read the final three steps when selling commercial property and gather more information from the experts