Getting the right property market intelligence will help you find and sell commercial property in any market. Your clients and your prospects will expect you to know exactly what’s going on out there in the marketplace. The more you know and can talk about will give you the edge in any negotiation to sell a commercial property. Perhaps this is the most important edge when you consider and compete against the offerings of various agents tendering or quoting for the same property.
So let’s look at what the market intelligence needs to be. As you gather your market intelligence for pricing a commercial property, know or question that the sources of your information are accurate and reliable. Many times you will have to support your decision on price by reference back to the source of your market information. The market information you use has to be today’s prices in the prevailing conditions which are similar to the property you are about to list.
Normally your sources of information will be:
- Title records are essential to fully understand that you are dealing with the real owners of the property. Make sure that there is not an immediate change of ownership going on such as a divorce that could limit the decision facility of the person you are talking to. When situations of divorce are underway, the negotiation on commercial property becomes protracted and difficult.
- Local Council records are worthwhile to check if any orders or notice exist on the property at the time of your review. They can impact the price or the interest of buyers when you market the property for sale.
- Town plans will tell you what is happening to the precinct and its future. Looking for zoning changes or road changes that impact the property is the first big issue. Highway changes can affect deliveries, passing trade, access, and many other key property factors. Zoning changes can redirect the way the property could be used in the future. All of these can frustrate the property use and limit buyer interest.
- Lease documents will tell you about the cash flow. This is very meaningful if you are a property investor because you are buying the property for the cash flow and the advantage it brings you.
- Survey plans will tell you about the boundaries, the location of the buildings, and the size of the property. Another concern will be any encroachments across boundaries. If in doubt get another survey done.
- Other agents active in commercial property will always have some feedback of relevance. Look at the number of signs that they have up on properties and assess the time that those properties have been on the market without sale. When times are tougher, the time on market extends. It is a good barometer of buyer sentiment and finance availability in property purchase.
- Valuers who are active in commercial property will tell you a lot about the current situation. They also need information from you to support other valuations.
- Sales listings in the area and their location or proximity to your subject property should be considered. They can delay or detract from your ability to market a fresh property. Buyers will always look at the fuller market to assess comparable properties. The sale prices from those properties will also be relevant.
- Properties for Lease in the area and the vacancy factor will tell you about business sentiment and interest of those businesses to be located in the region or property precinct.
- Achieved historic sales and leasing deals in the area will always be of use. Every property is unique and different therefore any sale detail from any other property should be backed up with a review of the property and an inspection of the location.
- Architects and engineers are always helpful when you are looking at a property which has physical or structural challenges. Remember also that is not just a building that brings you these problems, but also the geography and the demographics of the area.
- Your own sales records from past history are always useful. The details of sales from other agencies should also be gathered where the information is accurate.
- Tenancy schedules from other properties are always handy although they should never be regarded as completely accurate. Many property and leasing managers make mistakes on the tenancy schedules or do not keep them up to date. When in doubt the only documents you can rely on are the actual leases themselves.
- Other owners in the precinct are well worth keeping in contact with. They are always interested in other property sales and activity. They will also tell you what they know about the market locally.
- Other tenants in the precinct are useful points of contact. In the future they may require another property location and hence close contact is a wise strategy. It is however the awareness of the local area that tenants will share with you and give you the edge in market intelligence. It is very wise to know all the major tenancies in your area and the decision makers therein.
To lift and move your commercial real estate business forward it is the background market intelligence that will support your activities and negotiations. When you talk from your experience and complete market awareness, you have the edge over any landlord and any tenant; you have the edge over any property seller and any property buyer. In simple terms you can convert more business and more commissions.