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How to approach commercial property owner about purchasing
Posted on 3/7/23 at 8:31 am
Posted on 3/7/23 at 8:31 am
We've got 3 purpose-built facilities that we've been leasing for 25 years. Location is good, but not necessary for what we are doing. We are paying nearly 300K per year for the 3 buildings. When we got into the original lease, it made sense...cash flow was questionable and reserves were non-existent.
Ideally, we just buy these buildings from owner, but we're definitely open to the prospect of purchasing or building somewhere else.
Would it be best for a commercial broker to approach them keeping us anonymous? Or best for me to reach out directly to the owners and let them know we're interested...? 2 years remaining on current lease.
Thanks for any additional guidance/advice -
Ideally, we just buy these buildings from owner, but we're definitely open to the prospect of purchasing or building somewhere else.
Would it be best for a commercial broker to approach them keeping us anonymous? Or best for me to reach out directly to the owners and let them know we're interested...? 2 years remaining on current lease.
Thanks for any additional guidance/advice -
2
Posted on 3/7/23 at 8:53 am to AUjim
Make him an offer he cannot refuse.
Posted on 3/7/23 at 9:00 am to Wade Phillips
I’d reach out directly and save them the 6% commission. Might get a better deal. Just look at comps or I can email you comps from costar if you want (not a licensed real estate broker in LA).
The appraisal will be your stop gap to let you know if you’re paying too much.
Nothing wrong with a commercial broker either. You don’t pay them, seller does.
Email me if you need financing or have questions on the commercial lending side- Lnobles@redstickag.com
The appraisal will be your stop gap to let you know if you’re paying too much.
Nothing wrong with a commercial broker either. You don’t pay them, seller does.
Email me if you need financing or have questions on the commercial lending side- Lnobles@redstickag.com
Posted on 3/7/23 at 9:19 am to AUjim
A couple things I would highly recommend FIRST. Get an appraisal, as said above, so you know a fair amount to offer and plan on needing to go above that.
2ndly, I'd highly recommend looking into the costs to build elsewhere, move the business, etc. You want to do this for 2 reasons BEFORE talking to the property owner, so that you KNOW your bargaining power and so that HE can't call your bluff on leaving.
Then yes, once you have an appraisal done I'd approach the owner directly. I don't have experience, but I'd consider talking to a real estate lawyer on an hourly basis for help here. Cheaper then paying a realtor originally.
How attractive will the space be to someone else? An owner is more likely to sell if its not going to be easy to attract someone else, if he can easily get someone else and potentially at a significant increase in rent you are likely pretty fricked here.
2ndly, I'd highly recommend looking into the costs to build elsewhere, move the business, etc. You want to do this for 2 reasons BEFORE talking to the property owner, so that you KNOW your bargaining power and so that HE can't call your bluff on leaving.
Then yes, once you have an appraisal done I'd approach the owner directly. I don't have experience, but I'd consider talking to a real estate lawyer on an hourly basis for help here. Cheaper then paying a realtor originally.
How attractive will the space be to someone else? An owner is more likely to sell if its not going to be easy to attract someone else, if he can easily get someone else and potentially at a significant increase in rent you are likely pretty fricked here.
Posted on 3/7/23 at 10:17 am to baldona
quote:
Get an appraisal
Can I do this without the owner's knowledge?
quote:
How attractive will the space be to someone else?
Location is good, but again, relatively purpose built and I'm pretty confident would take a significant amount to 'build to suit'. But...unless these folks are just real dumb, we have made them very wealthy.
Posted on 3/7/23 at 10:42 am to AUjim
quote:
Can I do this without the owner's knowledge?
I would suggest a brokers price opinion if you go this route. Much cheaper and will essentially tell you the same thing. Usually they want inside the building for pics etc but since the opinion is for you and not a bank they can probably waive the site visit.
Shoot me the address and I can pull some comps off costar if there are any out there (depends if property is rural or closer in). I can’t write an opinion but can probably recommend someone if you want.
This post was edited on 3/7/23 at 10:55 am
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