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I’ve opined for months that Southern California is immersed in a seller’s market – there are many more buyers in the market than sellers – advantage sellers!
Today, however, I want to discuss WHY your commercial real estate isn’t selling.
After all, with more buyers around than sellers, you should be flush with offers – folks clamoring to buy your building – but nothing – crickets! So what’s up?
Below, are my reasons why your building isn’t in the sold category.
Your building is over priced. As we’ve discussed, asking prices are tricky. Hopefully you’ve looked at recently closed sales, compared those to what is currently available, checked the trends – up or down trending, and finally placed your building under careful scrutiny to determine its value. Great. You’ve established an asking price. However, if the asking price has no basis in fact – comps or avails to support it – your building will sit. Oh, you’ll get tons of inquiries – there are not a lot of available buildings – but no one will want to tour. Or worse, offer on your commercial real estate.
Your building lacks a key amenity. If you own a space with challenged loading, a logistics building with low ceilings, a manufacturing location with insufficient power, a service depot without an outside storage area for trucks – congratulations! Your building lacks a key amenity. Some of these issues can be solved with dollars – others cannot.
You are un-realistic in your expectations. If you have received a number of showings – with no offers – chances are there is a problem. You are likely overpriced or your building lacks a key amenity. With this market intel, if you continue to believe your kitty is the cutest in the contest and refuse to consider others may be cuter – your expectations are out of whack with the market.
There are use restrictions. We toured a building recently with a prospective buyer. Our guy liked the possibilities because there was a large outside staging and storage area – a key requirement of his occupancy. As we were completing our pre-proposal research, we discovered the area in question was unusable for the purposes our client intended. Furthermore, there was a giant easement running through the middle of the yard. Ooops. No deal here.
Your representative is un-cooperative. I’m honored to work in an industry with so many highly skilled professionals. However, on occasion we encounter a rogue element who sees the real estate brokerage business as a way to pad his bank account vs working in the best interest of his seller. If your activity is waning – it could be your representative is not doing what’s necessary to ply nicely with others.