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I'm a professional in the suburbs of Atlanta, GA (Gwinnett County). I and five partners own a 4600-sq. foot office condo with a set up that would be appropriate for medical/dental, lawyers, CPA's, etc... (10 individual 15' by 15' foot offices with a common break room, admin area, waiting room). We are looking to sell the building, but are unfamiliar with how commercial vs. residential selling works. We are in the process of interviewing agents/brokers, and have gotten wildly disparate ideas of what might be the right asking price (from a little more than half of the price we paid all the way up to a bit above what we paid). We understand that commercial real estate has not bounced back as much as residential, but are having trouble agreeing on a reasonable price.
A couple of points:
1. We obtained an appraisal in Feb. when two partners were hoping to sell their shares to the remaining partners. That number is between the two numbers quoted by the agents we're interviewing.
2. It's not a "fire sale." We don't have a timetable in which we have a deadline, but sooner vs. later sale is always good. We would rather this not drag on forever, but would not consider a ridiculously low offer just to get out either.
Can anyone give any tips on pricing and/or selecting the best agent/broker for us? I'm happy to give more info if needed. Thanks in advance.
The appraisal would be a good place to start with the asking price. The value will largely depend on occupancy; I assume that the building will be sold as vacant, and that does hurt the value to an investor of course. An appraisal should reflect the added cost of leasing up the building to a stabilized occupancy, as a deduction to the stabilized value estimate. Other than that - just check around with local commercial real estate brokers and try to find out who is selling office condos in your market. Find out asking prices and get their recommendations on pricing. Larger national firms sometimes have an advantage with their exposure to national markets, especially if sold to an investor. A good reputable firm will typically list the property on sites like Co-Star and LoopNet. In some markets, commercial properties don't even make it into the MLS.
Well, it's complicated. Some of the people in the building would like to stay, while others want to leave. There are three renters who are under lease until next June. Comps are hard b/c few of the closest ones are as "built out" as ours. Ours is free-standing, one story, and with high ceilings/tray ceilings/crown moulding/chair rails in the offices. Prices we've seen range from $60/square foot all the way up to $120/sq. foot, but none of them seem really comparable to ours (if fancier, it's too big of a building).
Just to add: we are confused re: whether to go with the more "optimistic" viewpoint (e.g., an agent who wants to price it higher and seems willing to do a lot of hustling) or the more "pessimistic" (or possibly realistic; we don't really know) one. The appraisal value is significantly higher than what the "pessimistic" agent thought we would be able to get.
The only way to do it is to locate the agency that specializes in commercial. Any agent can take the listing, but they don't have the specialized knowledge.
Commercial agencies often times do not advertise in ordinary media. They only advertise in specialist commercial media. But you will occasionally see their signs on buildings for sale or lease. It will specifically say they are a commercial division on the sign.
Value of your building is directly related to the income it produces. Solid leases in place would help you sell. Vacant buildings are more difficult to price and sell.
A commercial broker in your area should be able to look at the building and know what price per square foot it would lease for and thus can figure out what the sales price would be.
If you can get good solid reliable tenants signed to leases, it will help you to sell. Buyers should be running screening on your tenants, so don't try to cheat and put some undesirable loser in there just to have a lease.
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