When it comes to finding potential buyers for commercial properties, it’s important to understand the local property market. The majority of potential buyers will already be owners in the area and looking to expand their ownership portfolio.
When starting to look for buyers for commercial properties, and building up a list of potential local investors to work with in the future, it is important to focus your efforts.
First, target a type of commercial you want to work in; retail, office, industrial, hotel, multi-family etc. Then start researching who are the players, what are the numbers to make a good deal for this segment, who is lending on these types of transactions? These are just a few of the questions to start asking.
Think about how to approach these potential buyers. Are they more sophisticated, or more approachable? If you work in asset classes like retail and office, it’s a little easier to talk to the end user/tenant because you can walk right into their business and start a dialogue with the owner. You’d be extremely surprised at how many store owners have vested interests in other businesses and actually own property and are looking to invest. Obviously, not all of these owners will be responsive. But talking to as many people as possible, joining local real estate clubs, asking questions and networking with owners, realtors, bankers, lenders, and investors will greatly benefit you.
- Business owners needing new or larger premises
- Investors seeking to expand their portfolio
- New investors to commercial real estate that are seeking to take up a portfolio
Using a methodical approach to prospecting will make it significantly easier to find potential buyers. Not every property owner will be looking to buy, so it is important to get to know all of the big players in the area as well as create contacts with individuals and companies looking to expand their portfolio.
It is really important to tap into the local property market. Most buyers come from the local area. They know the area and understand how to find the right property for their needs.
Contact the current owners of desirable buildings to see if they are in the market to sell or expand their portfolios. You can obtain their contact information by visiting the tax assessor or county clerk’s office in the county where the property resides, or use a database like Reonomy to source the information you need.
Listing the Property
If you are looking for a buyer for a particular property, you may decide to list the property. This can be a great way to have a large and broad audience look at your property. CRE search engines like LoopNet and Total Commercial have large databases and have different features and pricing tiers based on your needs as a broker. Commercial listing database are full of clients who already have representation, but these sites can keep you informed of key market trends and players, which can be useful in the future.
Listing a property makes it more likely that a potential buyer will reach out to make contact. After working hard to win a listing, you want to make sure you are reaching the right people and using the best listing platform possible. But finding the proper listing platform can be a struggle itself. If you are looking for a listings platform, we have compiled a guide to the best commercial real estate listing platforms out there which you can read here.
Off-Market Deal Making
While you may be used to searching for new properties and buyers on a listing platform, there are major benefits to off-market deal making. If off-market deal making sounds complicated and time-consuming, there are now tools like Reonomy that can help you find buyers for your commercial properties. You no longer have to spend valuable time taking trips to your local county recorder, clerk, or assessor’s office to perform a property search and look up owners. You can now search for any commercial property ownership record nationwide with speed and ease.
One benefit of off-market deal making is the personalized approach you can take with the buyer. You have the ability to look at their full ownership portfolio to leverage your potential deal and present it with specific details in mind.
Another benefit of searching off-market is skipping the broker fees. This kind of direct purchasing can allow you to get more money directly from the buyer of the property, or skip fees that are usually incurred with a listed property.
Off-market properties also offer more flexibility. Negotiations can be more fluid and create better deals for both parties. This flexibility can be a big benefit based on the kind of deal you are looking to create. By using a tool like Reonomy, you have the opportunity to contact a property owner directly. Don’t look through multiple platforms and flip through listings to find one that fits your target criteria. Instead, you can filter your target criteria, select an area of search, and export contact information for owners to contact.
With Reonomy, easily navigate the database to find the information you need most. Other than filtering for property type, you can also search by past sales detail, debt information, geography and more.
Understanding Potential Buyers
Once you have successfully identified a number of potential buyers, it’s important to understand their specific needs. No two buyers are going to have the exact same needs in a commercial space, and the property you are going to sell is only as valuable as each individual buyer views it to be from their perspective. Get to know the kind of location and property size they are looking for, as well as the type of business they run, so you can better assist them in visualizing their business in this particular commercial space.
Finding Contact Information
Reonomy is a great tool for sourcing potential buyers in a couple of ways. First, finding comparable properties, searching neighborhoods parcel by parcel. Reonomy allows you to search any commercial property – filtered by location, building area, price, date sold, etc. You can use the map feature to move over the area of interest and click on individual properties for information.
After sourcing similar properties, Reonomy allows you to access the ownership information. By first selecting a similar building, the ownership info would reflect an owner who would likely be interested in your property. From there, you have a phone number, email or mailing address that will help you contact the potential buyer to see if they are interested in expanding their portfolio.
Finding Buyer Leads
If you have a range of properties that you are looking to find buyers for, you can run a few different types of searches. One way to do this in Reonomy is to search for recent sellers. Recent sellers typically have cash on hand and the potential to invest elsewhere.
You can also search for recent buyers. Reonomy users are looking at investors making purchases with the potential to make further acquisitions. You can try and of the example searches yourself within the Reonomy platform. Tailor your search on who you determine best to call.
Filter for buyers by Asset Class and Location
Use asset class filters within your location to identify owners of properties in the same asset class. If you are looking for a buyer for your multi-family apartment building, it would make sense to look around your area for other owners of multifamily apartment buildings. From there, you can directly access their contact information and look at their ownership portfolio. By viewing the ownership portfolio, you can look at all of the holdings they are associated with and determine if approaching the owner would be worthwhile.
Filter for buyers by comps
Use the comparable property feature to find other buildings similar to the property you are looking to sell off-market. Search the property you want to sell, and you can directly run a search for comps from the property details page in Reonomy.
Search by Owner
With Reonomy, you have the ability to search for properties by ownership information to unlock their portfolio. You can conduct a search in Reonomy by the name of the owner of record, the owner mailing address, and if it is owner occupied or not. With the ownership search feature, you can see every property the LLC or individual is involved in. This allows you to see the scope of their portfolio and further determine if it might be worth your time to approach a potential buyer. It also will help you figure out what the buyer is interested in on a wider scope. In terms of pitching your deal, if you can help them visualize their company in this space or appeal to their needs, you are more likely to convince them it is the right fit.
All of these tools allow a higher probability of fit for an owner – and a much stronger pitch because you know more information about the potential buyer.
By keeping a roster of possible buyers around, it is possible to target an appropriate buyer in a timely manner. The key to building your market share of property listings and opportunity is in maintaining a focused database of interested people that may transact commercial property now or in the future.
Most of the people you talk to when prospecting will not have a need for commercial real estate today. You can be lucky on the first approach to particular people, but it is rare. A large percentage of potential buyers have a future interest or need in commercial real estate, and you want to develop those relationships. Establishing relationships over the long term becomes a powerful tool.
Begin your search for buyers now with a free Reonomy trial.