How to Get the Highest Price When Selling Your Commercial Property
- By seoserviceusa93@gmail.com
- •
- 13 Dec, 2018
Contrary to what you may have previously believed, selling a commercial property is nothing like selling a house! While the house selling process may be fairly easier and can often be done by anyone with basic real estate knowledge, commercial real estate requires a lot more attention to technicalities. This is also the reason why you need a formal university degree in finances and professional training before you can successfully sell a commercial property!
The first step of the process, choosing your listing price is rarely just any figure plucked out of thin air. There are a number of factors that can raise or lower the listing price of your property, some of which we’ll discuss here:
Location
Remember the old adage in real estate: Location, location, location. Everything from the safety of the area your property is in and its accessibility to its actual physical location pay a major role in the final asking price you can list. The more desirable the location of your property, the higher it will sell for. However, this does not always mean that a property in a less desirable place of town will never sell!
Condition
The final listing price of your property may be dependent upon its age and history. Generally, newer built buildings sell for a higher price but properly maintained, upgraded old buildings may be able to get you just as much—if not more than—as a newer building. However, if your building is associated with negative events—burglaries, fires or bankruptcies—it might affect the final asking price of your property.
Remember: the better you maintain your property from the get-go, the higher an asking price you can attach to it when reselling.
Market Conditions
Supply and demand is key when buying or selling commercial property. The higher the supply and lower the demand, the less a property will sell for. Conversely, if you’re selling at a time when demand is high yet supply is low, you might be able to get a higher asking price than you would have at any other point in time. Additionally, depending upon market trends, specific properties may be more in demand at specific times and sell for higher.
Long story short, enlisting the help of a professional commercial real estate agent to accurately conduct a comparative market analysis (CMA) will help you determine the right time and listing price for your property.
Get the expert opinion by contacting us at Pivotal Commercial Realty, the leading commercial real estate brokerage in Toronto, Canada. Having successfully closed over $100 million worth of commercial real estate deals, and over one million square feet of leased land since our inception, we can provide precise support in site selection, establish a commercial real estate strategy and help you select a valid listing price.
Get in touch with us today to book one of the top realtors in the country.
Before you go ahead and sign any papers to purchase commercial real estate in Toronto, spend some time learning and understanding the market.
Investors in commercial real estate have to consider the following before they decide where they want to put their money:
Interest Rates
For the first time in 7 years, the Bank of Canada increased its interest rate in 2017. The interest rate set by Bank of Canada has a direct impact of the on the cost of taking out a variable rate mortgage as well as other loans.
Fluctuations in the Bank of Canada interest rates also influences the growth of corporations and consumer spending, which impacts the demand for both residential and commercial real estate.
Investors all over the globe think of Canada’s commercial real estate market as a safe haven. Even though there is some uncertainty about the rise of interest rates, the contrast between tight supply and growing demand for real estate in the country has been a driving force in the real estate market.
The commercial real estate market continues to be viewed positively by international real estate investors with Toronto and Vancouver being the most popular destinations. In 2018, Toronto was considered one of North America’s major real estate markets to invest in. In 2019, both Toronto and Vancouver are expected to be in the continent’s top 3 destinations.
The growth in commercial real estate is being pushed by the increased sales in office buildings. Even the political uncertainty between US and Canada did not hamper the success of commercial real estate in the country.
Major Markets
In 2018, Canada’s commercial real estate sector hit a record breaking $36.2 billion. This growth can be attributed to the increasing demand of industrial, office, retail, multi-family units and ICI land.
Those looking to invest in commercial real estate in Canada should consider Toronto, Vancouver, Calgary, Montreal and Ottawa. In 2017, most of the growth in the sector was driven by office buildings but in 2018, industrial real estate led the way.
In the near future, the demand for industrial real estate is expected to rise due to the increase of e-commerce business in the country that are looking to build fulfillment centers nearby for fast and easy delivery.
The commercial real estate market in Canada is continuing to flourish. However various factors are expected to make bring changes to the landscape in the future.
2018 proved to be a record-setting year for the commercial real estate sector in Canada due to an influx of new projects and high occupancy rates. With that being said, property owners are advised to monitor fluctuations in the market. Like all real estate, the commercial real estate sector of Canada is prone to disruption.
Let’s take a look at the key disrupters in commercial real estate in Canada:
Shared Workspaces
There has been a dramatic shift in the way people work in the country. Canada is experiencing a boom in the start-up community , many of which are led by Millennials.
Traditional office spaces are being replaced with co-working spaces that are designed to enhance collaboration, allow for greater flexibility and lower operational costs at the same time. Open offices are much cheaper than conventional cubicles. Younger professionals have found a way to work with limited office space.
Landlords can’t just lease out their building to select tenants, they have to redevelop their office space so it caters to the demand of the modern workforce. This can involve offering flexible suites or open concept office spaces.