If you don’t want the hassle of dealing with tenants, and you need a quick sale, selling your commercial property is probably the way forward for you.
In this article, we’ll explore how to find proceedable commercial property buyers.
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Factors to consider when selling a commercial property
Before you can market your property, it is important to understand what your buyers will be looking for. Their main considerations will be location, availability of finance, suitability and the property price.
The complex nature of commercial property investments appeals to hedge funds or private equity funds. Dealing with commercial estate agents can be incredibly stressful because the average time to sell a commercial property is 12 months. It is also important to remember that a buyer can withdraw their offer anytime prior to the exchange of contracts.
But there is another simpler way to sell your commercial building – without the hassle. Professional commercial property buyers are very few, and Property Saviour has the cash and the staff to be able to buy your commercial property without the stress. In fact, the sale can be completed in as little as three weeks, leaving you wondering what you will do next!
What are the factors affecting the value of commercial property?
The location and type of a commercial building can dictate its value, how it can be used and ultimately, the level of trade it will achieve for its owner. Recently, a number of businesses have adopted flexible working-from-home arrangements. This means that a number of office buildings are now sitting vacant. If you have an office building to sell, it might be tricky. It is no secret that our high streets are suffering due to out-of-town Retail Centres and the rise in online shopping.
Environmental considerations must also be considered, such as waste outputs, location relative to rivers and water reservoirs, proximity to built-up areas and any licensing regulations in force by the Local Authority. The buyer will need to take specialist advice and arrange any missing planning consents. This can sometimes take months; even then, the permission may be refused at the last hurdle.
Commercial properties are harder to finance
The banks require deposits of around 40% of the purchase price of a commercial property. Unlike residential mortgages, commercial mortgages require a shorter term of 10 to 15 years. They must be on a repayment basis, and the rent must exceed over 40% of the monthly mortgage repayment. This affordability stress test was introduced by the Bank of England following the 2008-2009 financial crisis. This means there are fewer commercial property buyers in the market.
For large retail spaces – formerly known as class A1, which changed to class E(a) in 2020 – your buyer would likely prioritise a prime high street position with superior footfall. If you sell a modest shop in a secondary community location, perhaps a specialist grocer or clothes shop would fit this footprint well. The type of premises, therefore, largely dictates the potential buyer.
Warehouses are often located in industrial estates to allow cheaper rents, higher ceilings, forklift trucks or access to lorries. A small warehouse attached to office space has more limited usage, so it may be harder to find the right buyer. If you are looking to sell an industrial unit, we’d love to buy it.
If you wish to sell office space, the location is mainly relevant to the type of business being carried out. These properties with E(b) usage (formerly B3 use) are often used by estate agents, accountants or solicitors who will need public access, reception areas and back-office admin areas. Offices for customer service functions and call centres can operate from cheaper industrial areas, with hundreds of car parking spaces for staff.
How can I value my commercial property?
The factors above largely influence the overall price. Commercial property is then valued using several different methods:
- Cost – the cost of land plus the cost of construction
- Income – based on potential net income and cap rate
- Sales comparison – based on similar property prices in the area with similar features
- Gross rent multiplier (GRM) – the ratio of the property price to gross income
- Value per door – compares individual unit prices within the property to another similar property
If you want to sell your commercial property in a rush, the traditional route will be unsuitable.
Selling to a cash commercial property buyer such as Property Saviour will be completed in under a month, with funds in your bank. We will also pay up to £1,500 towards your legal fees.
How to sell your own commercial property?
If you have time on your hands, you can try to sell a commercial property yourself.
If you’re in a tricky spot with troublesome tenants, or shoddy leases, or you need a quick get-out because your health is failing, we can buy your property for cash within 28 days.
Money in the bank means total freedom from the stress of dealing with tenants.
Where can I find cash buyers for commercial property?
At Property Saviour, we buy commercial properties all the time, so we know the pitfalls and what you might need to consider if selling privately or through an agent .
We are used to dealing with a range of commercial property problems – we buy regardless of :
- structural defects
- illegally sublet buildings
- sitting tenants
- inappropriate property use class
- improvement notices issued by the local council
- end of mortgage term
- commercial lease forfeiture, eviction and repossession
We don’t buy properties on behalf of investors. We buy the property for our own investment portfolio. As genuine commercial property buyers, we have the ability to pay you. We’re happy to provide you with proof of funds.
Property Saviour can exchange contracts quickly without you having to wait months to find a buyer or tenant. As a business landlord, this helps you avoid further losses where tenants aren’t paying their rent. Business rates, rent loss, empty property insurance, and utility standing charges can quickly mount up to a sizeable sum.
It’s a huge decision to make, but it costs nothing to give us a call and chat with our experts about your options and what you can expect, even if you’re considering an auction sale.
We can make you a free cash offer on your commercial property, and we can complete the purchase within a couple of weeks.
It costs nothing to find out what we can offer you for your commercial property.