It’s common to run into challenges when you’re first learning how to sell commercial real estate. Finding leads for potential buyers, knowing how to competitively but lucratively price your property, and finding a service to streamline the process are all challenges to navigate. With the right knowledge, however, you can transform those challenges into opportunities.
Getting started selling commercial real estate
In this post, we’ll cover what you need to know about selling commercial real estate, providing you with tips, tools, and advice that make the process go smoothly and profitably. Before we dive into more of the specifics, let’s walk through some general points that are important for any broker to be aware of, especially if this is your first time selling commercial real estate. Here’s an overview of the topics we’ll cover:
- Commercial real estate is not the same as residential real estate. If you are currently a residential realtor trying to break into the lucrative commercial real estate industry, good for you—it can be quite the profitable career move. However, you should know upfront that there will likely be a bit of a learning curve. We’ll cover more on that in the next section, and explain how commercial real estate sales are unique.
- There are many ways to find buyers. While residential realtors often rely on a combination of word-of-mouth and online listings, commercial real estate can often occur in a sales environment that’s more business-oriented. You’ll still want to get the buzz going about your property through word of mouth and online listings, but remember that your business connections will be especially key in the commercial real estate ecosystem. We will cover this in detail in a later section as well.
- Marketing is key. Remember: real estate is a business, and every successful business knows how to market itself. If you want to attract the most lucrative deal possible, it’s essential that you cast a wide net, make your property appear the most desirable, and utilize commercial real estate marketing tools to streamline your workflow. We will cover more on this in our final section.
Keep reading to learn more about these three instrumental elements of commercial real estate success.
Residential vs. commercial real estate sales
Many people have at least some familiarity with residential real estate. Whether that’s because you’ve bought or sold your own house, or because you’re an agent in the real estate game, many of the industry terms are likely going to be familiar. Let’s first review the similarities before diving into key differences you’ll need to know before learning how to sell commercial real estate.
- Buyers will likely take out loans. Commercial property can be pretty expensive, with even modest listings costing millions of dollars, simply due to their size and location. Naturally, most commercial buyers will need to finance the purchase, just as homebuyers often do. That means, as the seller, it will be the financing company that actually pays you, not the buyer themselves.
- Market shifts impact your bottom line. Just like the housing market, the commercial property market fluctuates. When you’re trying to sell commercial property, pay attention to the current state of the market. If there are tons of properties available (high supply), and few buyers (low demand), it could be a good idea to hold off, as the surplus might drive prices down. Oppositely, if yours is one of the few spaces available, and demand is high, that could result in higher bids from prospective buyers.
- It’s smart to entertain a number of offers. If there’s a solid amount of demand for the type of property you’re selling, you’ll likely get a number of offers. While it may be tempting to jump at the first chance you see, part of knowing how to sell commercial property is knowing when to hold off more offers. That way, you can create a bidding war and drive a higher selling price.
- Zoning laws apply differently. Zoning laws are usually put in place by local municipal governments to determine what sorts of buildings can go where; you can’t build a high-rise in the suburbs, or a small two-bedroom in a mall, etc. They can also be more specific, however, so be sure you’re up to date on the kinds of uses that your building is permitted for, so you know how best to market to possible buyers.
- Business owners can be more competitive. While there’s no doubt that residential home buying can be pretty cut-throat, most people buying homes aren’t looking for an aggressively competitive edge that frugal business people buying property likely are.
- You may face stronger competition. Commercial real estate is a huge industry. Large companies have endless resources necessary to market their properties in appealing and compelling ways, as well as the ability to offer lower prices that beat out competition. That doesn’t mean you don’t stand a chance—far from it. But it’s wise to be aware that there are likely big dogs already operating in the space.
Once you have an idea of the differences between residential and commercial real estate, it’s time to think about one of your biggest priorities: finding buyers. Let’s cover that now.
Finding commercial real estate buyers
Easily, one of the most important things to be aware of when learning how to sell commercial real estate is where to find buyers. This can vary significantly based on the kind of property you’re selling—obviously, a highway gas station is going to attract different buyers than a restaurant-fitted storefront downtown. However, the pool of potential buyers you have access to can also vary based on who the seller is, too.
If you’re selling commercial real estate, you’re likely to fall into one of two main categories: the owner of the property, or a broker or agent who is managing the sale of a property on an owner’s behalf.
Selling commercial property as a broker
If you’re a broker getting started in the commercial real estate game, you probably have a general idea of how selling property ought to work. However, it takes several years on the job to truly learn the ropes, so don’t feel bad if you’re still a little fuzzy on the details. These are a few tips to keep in mind as you prepare for a sale:
- Keep up to date with the tools of the trade. If you operate solo, you’ll want to be sure to develop a professional website so you can better market yourself (more on that below). Be sure you’re using innovative CRE tools to make your listings stand out.
- Actively seek out mentors. Handling everything by yourself is difficult and unnecessary—there are likely many veteran commercial property brokers in your ecosystem whose help you should seek when navigating the difficult terrain of first-time property sales.
Key marketing strategies
The next thing to focus on when learning how to sell commercial real estate is marketing. Real estate sales are, after all, the sale of a product. You’re trying to convince potential buyers that your property is appealing, and that it fits their needs better than any other product on the market. Just like any business, marketing tips for realtors are vital.
At biproxi, we make marketing your property easier than ever by managing vendors and handling many of the logistics behind commercial property sales. A few of our key commercial real estate marketing services include these featured options:
- Professional Property Photography: stunning photos that highlight the best your property has to offer, clearly taken, so buyers know all the best features of your offering
- Virtual Staging: virtually furnish your real estate photos to show off your space without the expensive monthly cost of formal staging
- 3D Floor Plans: high-tech, innovative floor plans that buyers can explore prior to committing, making them more secure in their decision to move forward with your sale
- Property Evaluations Report: comprehensive and data-backed reports on the valuation of your property, giving you key insights into ideal asking price points for your selling commercial property
It’s also important to make sure you’ve got your own suite of marketing platforms. If you don’t already, be sure to invest in:
- A professional business website to host your listings
- Social media accounts to advertise to a wider audience
- Listings on commercial real estate databases that likely buyers frequent
Selling commercial property is a challenge. However, approaching it with the right mindset and with the right set of tools in your pocket can help ensure that you are able to profit from your investment.