The real estate developers, multi-national corporations, high-tech companies, condominium developers, individual owners and investors are the usual clients connected in the acquisition and disposition real estate trade. Therefore, there are some essential factors needed in order to acquire and dispose of a commercial property. These include tax deference considerations, negotiations of the deal and its conditions, the documentation of every aspect, and closing the actual purchase and sale of the commercial property. We are here to help you thought all stages of acquisition; from identifying investments, market research, evaluation, offering bids/letter of intent, financing, complete due diligence, to closing. If the offer is accepted, the commercial real estate acquisition is completed and the property moves into the management phase of the investment lifecycle. During this phase, key responsibilities include collecting rents, paying expenses, and generally ensuring that the property is in good condition for tenants and visitors.
This includes inspecting roofs, foundations, HVAC systems, and environmental conditions like potential asbestos or lead paint presence. Experts such as structural engineers might be brought in for an assessment to uncover any issues that could cost you. You might be aiming for high rental yields, long-term capital growth, or a mix of both. Consider factors such as location, property type (retail, industrial), tenant profile, and budget constraints when establishing these benchmarks. As part of your transaction, we can assist you with structuring and implementing like-kind exchanges under IRC §1031. Determine potential locations, specific real estate or space needs, budget and desired returns.
Guiding The Property To A Smooth Closing
Commercial real estate investment offers a promising avenue for generating substantial returns. The intricacies involved in property acquisition, due diligence, closing, and asset management underscore the need for careful planning, meticulous analysis, and strategic decision-making. As market conditions and asset performance change, a thoughtful strategy and process for real estate acquisitions and dispositions is key to maintaining a strong portfolio performance. Plante Moran Realpoint (PMR), formerly Plante Moran REIA provides a breadth of capabilities to help you structure and complete your transaction. We focus on identifying and mitigating risk while providing unbiased and transparent counsel for ongoing decision-making. In commercial real estate, the disposition process is the act of selling, subleasing, or conducting a lease buyout of commercial real estate property.
- We keep tabs on local development plans because they can affect future property values significantly.
- We share your objective and apply our market intelligence and industry expertise to structure transactions to surpass your expectations.
- For properties to be secure, our emergency line gives our clients confidence and peace of mind.
- Traditional lenders take months to scrutinize every detail, from your credit score…
- If you are concerned that the buyer may back out before the contracts are signed, you may request an earnest money deposit.
- If a company decides to use this strategy, it will be important to retain legal counsel for help drafting all of the different required legal documents.
Also, they will put out the property for sale and connect with you the interested buyers. This for sure will be one way for making the complete process very easy and also hassle-free. They ensure their strategies align with these insights to boost value and attract quality tenants.
His portfolio of properties includes residential holdings as well as rental properties in various markets throughout the Pacific Northwest and United States. Jeff joined CEP Multifamily in 2022 as part of our pursuit to expand our operational capabilities and to bring project management and asset preservation under our in-house suite of services to better serve our growing portfolio. When the investment is at the last stage of the planned holding period, the investors want to get back their money.
This vast knowledge has contributed to his success overseeing the corporate financial reporting, cash management, budget coordination, and year-end audit and tax responsibilities at Hokanson. With over 25 years of experience, he focuses his expertise on development of office and medical space, and corporate consulting. Boyd has been actively involved in the development of nearly $600 million worth of real estate, including client partners like IU Health, Springleaf Financial, Vectren Corporation, and Old National Bank.
- Mike brings many years of business leadership, entrepreneurial drive, and real estate experience to the table.
- Market the property directly to users, tenants and investors in addition to the brokerage community to ensure that your property is getting the maximum market exposure.
- In addition, a commercial property management firm can offer unbiased advice and act as the buyer’s or seller’s representation.
- When market conditions reach a point where this price can be achieved, the disposition process begins.
- This involves analyzing the local real estate market to determine when the most favorable time to sell is.
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Before you put out your property for sale, make sure all the required documents are ready. It is considered a standard process to offer the interested parties a pro forma; if you have a tenant in the building, you need to provide them with a lease copy. Similarly, if there is an easement on the property, you need to provide them with the paperwork. Now that you better understand the real estate transactions, the next step is to understand the strategies one can use for this position as an investor.
Commercial Rental Property Rental
On the flip side, the seller earns interest on the “loan” and could actually end up earning a larger return over time, assuming the buyer doesn’t default on the loan. After the transfer of the property’s title and funds, the disposition process is complete and you have officially optimized your portfolio by divesting an unsupportive asset. Through the disposition process, organizations rid their portfolio of any assets hindering growth, enabling companies to devote more attention and resources to CRE assets that are driving their business forward.
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Again, bemoaning the reason of why it is beneficial to contract with a professional. Finally, partnering with the right professionals can help ensure a smooth disposition process and maximize profits. This can include hiring a real estate broker, attorney, appraiser, or other real estate professionals with expertise in the disposition process.
Property Management Companies
During the process, some assets may be identified as unsupportive, meaning they do not enhance key business objectives and no longer add value to your business. If the unsupportive asset is owned, the best approach to divesting (or, removing it from your portfolio) may be through a disposition process. Before making an offer, it is in your best interest to make it subject to certain conditions (laid out by both buyer and seller), such as favorable finance options, and approval of the terms and conditions of any tenant’s lease. Also, stipulate that no other party can purchase the property unless the conditions are failed to be met by an agreed upon date. Over the last nine decades, the company has aided in the strategic acquisition and disposition of some commercial real estate acquisition and disposition of the nation’s most specialized, high-profile, and complicated sales–many being sold to international companies.
Commercial Properties Management
The acquisition or disposition of a commercial real estate property requires a mastery of financial analysis which is one of the strongest skills the lawyers at Levy Zavet PC (“Levy Zavet”) possess in the legal profession. Levy Zavet’s real estate lawyers are not just legal professionals but also investment analysts crucial for the success of the business side of the overall transaction. Levy Zavet ensures that the property asset works effectively with your other investments to successfully reach certain financial goals.
Stephen P. Hokanson
Each phase requires a particular approach and set of strategies to ensure a successful acquisition. There are many factors to consider and conditions to meet when pursuing and managing investment properties. Real estate asset management can feel convoluted and overwhelming without a sound financial analysis and a deep understanding of all property types. Senior managers already have their hands full with other vital responsibilities—so figuring out the perfect approach for a real estate disposition process can become an uphill battle. In the first phase of CRE disposition, the seller works with an experienced real estate broker to prioritize objectives (timing, financial goals, perhaps environmental considerations) and outline an initial disposition strategy.
Just as important as purchasing a property at the best price, selling at a reasonable rate is essential. In general, there doesn’t exist a right answer to when and why to dispose of a property. Instead, investors must rely on their expertise and knowledge of the market to make the decision.