What is the best time to sell your commercial real estate? How do I develop a strategy to get the best possible price?

If you’re holding commercial real estate property, there may come a point when you decide to sell. It might make sense for your overall investing plan, or perhaps you could have a loan coming due. Your financial goals and overall market conditions can also play a role in deciding whether to sell. The timing of the sale can impact the return you receive on the transaction. If you understand the process involved in marketing a property, and can be patient, you could set up a strategy to get the best possible price. Sellers who choose the right broker can often reap great outcomes too. Follow these steps to plan the timing of your sale and get the highest price:

Account for the Sales Process

The average sales process for commercial real estate in a primary market usually takes about six to twelve months. Initially, a few weeks are spent gathering information and creating brochures. Following that, another month or two is dedicated to maximizing exposure. The final stages, which involve sending out contracts and waiting for buyers to secure financing, can extend over several more months or even a year.

Sometimes, sellers cannot afford to wait this long. Owners might choose to delay the sale until market conditions improve, risking an overly long postponement. It is also important to remember that the commercial real estate market is not seasonal. However, holidays should be considered, as people may be traveling and unavailable, particularly at the end of summer.

Be a Patient Seller

In times of market uncertainty, both buyers and sellers often prefer to stay on the sidelines. Buyers may hold off, hoping for better opportunities to arise later. This behavior was evident starting in mid-2022 when interest rates began to climb. Long-term investors sometimes choose to take on debt conservatively and, instead of dealing in a high-interest-rate market, they pause their purchases until conditions improve and rates drop.

Therefore, if you are a seller and can afford to be patient, you’ll increase your chances of achieving the best outcome. Waiting for buyers to be ready allows you to evaluate incoming bids more effectively. Avoiding the need to transact under pressure gives you the time to seek higher prices.

Collaborate with the Right Broker

Your relationship with the broker managing your property sale can significantly impact the outcome. It is essential to understand their marketing strategy for your property. Will they aim for maximum exposure? If so, this can attract more interest and lead to higher bids. Additionally, assess the broker’s track record and experience with your type of asset. Examine their team to gauge the resources and attention you will receive during the sales process.

Selling commercial real estate often involves multi-million-dollar transactions that do not happen overnight. Knowing that the process can take at least six months to twelve months, being patient, and selecting the right broker will help you navigate the market’s complexities. This strategy will maximize your return on investment and set you up for long-term success.

There you have it: an overview of selling your commercial real estate. Finding a commercial agent that will stay by your side, help you face these unpredictable times with confidence, and create a strategy to get the best possible price is very valuable. Give us a call today at Full Sail Commercial Real Estate, Mankato, MN at 507-317-2352.

This article was excerpted from Forbes and was created to help clients and real estate professionals in commercial real estate operate more productively and efficiently. REFERENCE: https://www.forbes.com/sites/jamesnelson/2024/05/26/finding-the-best-time-to-sell/?sh=11516bf6a44a