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Industrial Property and Commercial Business Buildings for sale in Johannesburg – Are They The Answer To Your Investment Problem?

Selling Industrial commercial properties is not an easy task. The most common thought that comes to most when selling property is which real estate agent to choose. There are thousands of real estate agents that are listed in the phone book, online, advertised on television and in the street. So who do you choose?

Warehouse Lease

Never go with your first option – there are so many real estate agents to choose from, so you should always research agents thoroughly. Selling your factory property is an important decision, so make another important decision by choosing the right real estate agent. Find out how below:

• First, try to use someone that is reliable. The best way to find out who is reliable is by seeking candidates that your friends or family have used in the past. These people will be able to give you a truthful and firsthand experience of what it was like to work with that particular real estate agent.

Industrial Property Brokers

• Another benefit of the real estate agent is if he or she has sold and is familiar with the neighbourhood where your commercial property is located.

• Lastly, the schedule of you and your agent should be compatible. Communication is key in selling property, but if you and the agent cannot find a common ground in your schedules, it is unlikely that the partnership will turn out favourably.

If you follow these tips to choosing the best real estate agent to sell or lease your commercial property then you should be well on the way to being a happy landlord or even a very wealthy vendor!

The Difference Between Industrial, Retail and Commercial Real Estate

Industrial Old Factory For Sale

When you are trying to get comps for commercial real estate it is imperative that the comps you get are up to date, since you need to know what the property you are looking at is currently worth. This will help you get an accurate idea of what the market value of the property is. When you go with comps that are too old, it will not give you an accurate idea of the value in today's market. Usually you'll want to go with commercial real estate comps that are less than six months old. The comps you get also need to be "like" comps as well, since you'll want the comps to depict the accurate value of the property you are interested in. Basically you don't want to compare an industrial property with an office building, since this won't enable you to come up with the accurate value. Be sure that the comparables you get are similar to the size and type of the property you are looking into.

Considerations When Researching Comps

When you are researching your comps in order to acquire accurate data on the commercial real estate you are considering, there are several factors you'll need to keep in mind. The following are a few things to consider in order to get the best possible comparables.

Consideration #1 - Similar Properties - The comps that you choose need to be similar properties, in both type and size, to the commercial real estate you are planning on purchasing.

Consideration #2 - Price Range - The price range of the properties that you use for comps should be close to the asking price of the commercial real estate you are planning on purchasing.

Comps that are "As Is" - These comps are properties that are similar to the commercial real estate you are considering in the current state of disrepair and current zoning. You cannot use comps that have been rezoned or improved.

After Developed Value Comps - This is a comp that involves land that has been improved with the infrastructure needed for building construction. This can include sidewalks, curbs, streets, utilities, gutters, and sewer.

After Repaired Value Comps - These comps are used when you have a building that needs to have some repairs done. This deals with the price that the property will be worth on the current market after you have restored it to good condition.

As you can see, having accurate comps is very important when getting into a commercial real estate deal. If you cannot get your broker to give you the comps you need, then you may want to tell them you'll have to either get out of the deal or find another broker that can help you find the comparables you need to make an informed decision. Usually, this will help motivate the broker to get the comps you need, since the broker won't want to lose the deal or their commission. Either way, make sure you find strong and accurate comps that allow you to make an informed decision on your commercial real estate deal.

How to Find Strong and Accurate Comps for Commercial Real Estate

Industrial Retail Property For Sale

A real estate agent listing a commercial property should undertake a detailed property inspection before they give any indication of price or rent to a landlord or property owner. In only this way can they really know what the property is all about; that is what positive and negative aspects the property can create as an investment.

Every property is different and for that simple reason it pays to have some form of checklist to run through when as an agent you are listing the commercial property. The focus of the inspection will change depending on whether the property is to be for sale or for lease but here are some of the key issues that you would want to know about in listing the property for sale.

  1. Ownership of the property together with the split if any on property ownership

  2. Decision makers for the ownership

  3. Location detail and survey plans of the plot

  4. Details of the improvements in the property

  5. Details of all the leases and occupancy documents that apply to the sitting tenants

  6. Tenant contact detail for access in further inspections

  7. Details of rental paid at the current time and how that is documented

  8. Vacancy factors and areas that are soon to become vacant

  9. Details of the expenditure to run the property both today and over the last 3 years (in this way you can check the way the property has performed)

  10. Orders and notices that may have been issued over the property and which remain outstanding

  11. Matters relating to current negotiations in leases for further terms or amended lease situations

  12. Details of any existing lease incentives that have been provided to tenants currently and which remain active for the future

  13. Access arrangements for people and vehicles getting into and away from the property

  14. Any encumbrances, liens, and interests from other properties in the area and that can impact the subject property

  15. Services and amenities that serve the area and the property

  16. Energy supply and energy consumption factors

  17. Environmental factors that are current or could impact the property usage

  18. Heritage matters that can impact the property

The list does not end here but it is a good summary of the main elements that apply in a property inspection. Any one of these items could have issues to impact the price of the property. Importantly you are finding the issues before you price and list a property.

When you have the property correctly documented it makes the sale and any lease negotiation much easier. Most buyers today will undertake their own due diligence in the sale and settlement process. Make sure you find the problems before the buyer does and have all the right answers ready.

How to Market Commercial Real Estate for Sale or Lease

Industrial Old Factory For Sale

What commercial property types should you buy? You should consider the pros & cons of each property type, as well as, have a good understanding of your investment objectives and your experience. These factors will help lead you to your ideal commercial property.

Listed below are the most common commercial property types.

Apartments/Multi-family
Apartments or multi-family buildings are usually the first choice for new commercial investors. Apartment management and financing is very similar to residential, and so new investors feel more comfortable with them. The main disadvantage with apartments, is that they are management intensive.

In order for an apartment to be considered commercial property, it must have 5 or more units. There are numerous sub-types of apartments:

  • Low-Rise Garden Apartments

  • Mid-Rise Apartments

  • High-Rise Apartments

  • Student Housing

  • Military Housing

  • Townhouse Style

  • Co-op
  • When you are looking at properties to purchase, pay close attention to the location and general market for that area. You will want to avoid properties that are located in economically depressed or seasonal areas. Also, the property should have acceptable aesthetic qualities to be competitive with market standards and have a minimum occupancy of at least 85%.

    What if the property you are evaluating has inferior physical characteristics or is in an economically depressed area?

    You may have a higher interest rate, higher reserves and tighter underwriting constraints.

    Healthcare
    These property types are nursing homes, congregate care and assisted living centers. Properties should be close to retail and community services. Be cautious of properties in economically depressed or seasonal areas. Also, be sure that the property complies with ADA requirements.

    Hotel
    Hotels are characterized as either Full Service or Limited Service.

    Full Service Hotels can be further divided into Luxury, Upscale, Mid-scale, and Extended Stay hotels.

    Limited Service Hotels can be further divided into Mid-scale, Economy, Budget and Extended Stay. When considering hotel properties, the property should have a stable operational history. A property with a history of four or less years should be scrutinized. The minimum acceptable occupancy is usually 60%. Lenders also prefer franchise affiliated hotels with franchise agreements extending beyond the term of the proposed loan.

    Industrial
    These property types will have usage for industrial purposes only. Such as

  • Warehouse-single tenant

  • Warehouse-multi tenant

  • Manufacturing

  • Research & Development

  • Flex Space

  • Light Industrial

  • Heavy Industrial
  • Self Storage
    Also is called Mini-Storage, it is used for personal storage for lease by consumers.

    Other Specialty
    These property types are unique and the financing them can be difficult. They include
    gas stations, oil change facilities, etc.