It continues to be a seller’s market. Properties under a million in the Twin Cities are hard to find and when you do, they're going fast. That’s especially true for industrial commercial properties. It’s important to have your timing right and know how to strike when the iron’s hot.
Here are my five recommendations to help your strike:
1. Get a broker. Not just any broker, you want the right broker. You want one that has current market knowledge and experience in handling CRE deals in this fast market. You also want one that is driven, connected, and a great problem solver. You need a broker that has built strong relationships in the industry and can break through the line of all the other brokers and their clients.
2. Have a strategy. For each building for sale, we’re seeing record showings. There’s not a lot of time for questioning or thinking it over. You want to stand out from the other buyers, so work with your broker to come up with a plan. Send the seller a letter of intent as an outline along with a completed purchase agreement to begin the deal.
3. Be ready. Have your bank be prepared to IMMEDIATELY send a bank letter, so you can include it with your offer. This gives the seller confidence that you have the ability to close. Especially in the current market, you want to enter each potential deal ready to execute, including having your financials in order. Sellers are looking for quick, smooth deals. I sometimes come across brokers that have not prequalified their client, especially inexperienced agents who only do a couple of commercial deals a year. That delay can make you lose the deal.
4. Be assertive. If the property is the best fit for you, make a move. I say it all the time, this is not the market for “analysis paralysis.” If you want the deal, you’ve got to step up. Sellers are looking for buyers that are serious and not wasting their time or tying up the property.
5. Keep it simple. Sellers and their brokers are looking for buyers with limited contingencies. They are evaluating buyers – the moment they meet them – in order to pick the right one. A deal loaded down with needs and contingencies means the property could be tied up to give the buyer extra time to consider but not result in a sale for the seller. Smart sellers, with the guidance of their broker, are going to pass on your offer and move on to a simpler deal.
Conclusion
Getting a commercial real estate deal done in tight market, requires a potential investor/buyer to be ready. Work with a broker, be strategic and assertive, and keep your asks simple. If you have any questions or are ready to strike when the iron’s hot, let's connect.
Jeff Salzbrun is the owner and broker of Commercial Equities Group (CEG). As a veteran-owned real estate brokerage, CEG has been involved in thousands of sale and lease transactions, ranging from single offices to 250,000+ square foot buildings. At CEG, we get your deal done. We know space, and we know the CRE business.
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