Commercial Real Estate Land For Sale Near Me Randburg

How Do you Select Best industrial property and commercial business Buildings for sale in  Randburg?

[tag]  is a specialist field. Not all property agents know enough about the commercial property market and the property type to do it well. Sellers in Randburg should choose their agent with care.

The owners of investment property that want to sell their asset should carefully choose a real estate agent that is well versed in the market trends and the property type. That agent should also show a high level of current market share and success in commercial property in Randburg  over the years.

Industrial Office For Sale

Selling commercial property is not an ‘experiment’ or an exercise in ‘hope and pray’. When undertaken correctly in any market situation by a skilful agent, a property will attract enquiry and a sale is possible. The result then sits on the client’s ability to accept the industrial property for sale market price and market evidence. There are always buyers out there; they just have to be found and the sellers need to be accepting of the market trends.

Interesting Facts About Industrial Property and Commercial Business Buildings for Sale in  Randburg:

Industrial Land For Sale

Before we answer this question, it might be helpful to actually define each term first.

Retail and industrial are both considered 'commercial real estate' (as opposed to 'residential real estate'). Commercial real estate refers to buildings or land intended to generate profit; industrial and retail are simply sub-categories of commercial real estate.

Firstly an industrial property is defined as a property used for the actual manufacturing of something, and can be considered either a factory or plant. This is usually zoned for light, medium or heavy industry. This includes things such as warehouses, garages and distribution centers etc.

Retail property is a commercially zoned property used solely for business purposes, the actual selling of the product, rather than its manufacture - retail stores, malls, shopping centers and shops all huddling nicely under the retail umbrella.

3) Natural Light - in especially high demand nowadays

4) Location - close to other offices, public amenities, transportation etc.

Since 1980, retail property has returned an average of 9%, though is currently returning around 6%. Industrial real estate tends to be the most volatile, and is currently returning around 7% (as opposed to its peak of around 12% during the 1990's recession).

And obviously, no matter which form of commercial property you're considering, read the lease carefully. Sounds like a silly thing to say, but you'd be very surprised at the issues that can become issues simply because things weren't read properly!

How to Find Strong and Accurate Comps for Commercial Real Estate

Industrial Old Factory 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.

Search for Business Land For Sale Near Me in  Randburg

Industrial Property Brokers

"Property on ground lease" is among the most confusing phrases, even to commercial real estate brokers. There are up to 3 parties in a "property on ground lease": the business owner, e.g. Burger King, the landowner and the building owner. When you see a sale of "property on ground lease", it could mean:

1. Sale of land only. In this case, the building owner is the tenant, e.g. Burger King that has a business in the building. The tenant typically signs a 10-20 years absolute NNN ground lease with the landowner to lease the parcel. Should the tenant not renew the lease or be in default of the lease by not paying rent, the building with substantial value is reverted to the landowner. The tenant will make every effort to pay rent to avoid losing the building to the landlord. And so the cap rate for this property is about 1-2% lower than a property with both land and building.

There are a couple of possible scenarios that could lead into a land sale only:

· The business owner, e.g. a Burger King franchisee, could own both land and building originally. He then structures the sale of land only to an investor and then leases it back. He receives the tax benefits of being able to depreciate 100% of the building and fixtures. The tenant could later sell his interest in the building without the land to another investor and lease back the building.

6. Is it easy to sell your interest if the lease has a few years left? If you own the land, your interest may be hard to sell, but still sellable. Once the ground lease expires, the building owner owns nothing. As a result, this can make it quite challenging to find a buyer for the building.

7. Tax write-off's: Land does not depreciate for income tax purposes. The building, on the other hand is 100% depreciable.

8. Financing: if you buy the land portion, you should be able to obtain 65% LTV financing in today's market, just like a typical property with both land and improvements. However, it's very difficult to get financing for the building acquisition, especially when the ground lease has less than 20 years left.

Therefore, when you see a "property on ground lease" for sale, make sure you know what you are buying, considering there are many factors involved that can adversely impact/contest an investor's decision. If you're contemplating on buying the building without the land, think twice and make sure you have a clear understanding of all the plusses/minuses involved in this decision.

Commercial Property Types-Which One Is The Best?

Property For Sale

Not all commercial investment properties should be auctioned, but the auction method of sale does have real advantages if the property is just right and the market is accepting of that method of sale. Here is why.

The key governing factors to determine if auction is a real chance or choice for the property owner are the current levels of enquiry for that property type, and the prevailing business sentiment. If this is the case then you can look further at auction.

The auction method of sale is a proven time based sale process that flushes out the enquiry and if the investment property ticks all the other boxes such as:

  1. Preferred property type in the local market.

  2. Good improvements on the property.

  3. Location factors that attract enquiry.

  4. Capital growth opportunities.

  5. Good tenant profile or anchor tenant.

  6. Good lease structure that supports stability of rent.

  7. Low vacancy factors and associated risk.

  8. Tenant mix that is well structured and balanced for property function and rent growth. This is really important in retail property.

  9. A realistic seller with a reserve price that allows for comparable property evidence and other sales history.

  10. A vendor funded marketing campaign that targets the right buyers and activates enquiry from them.

  11. Acceptable (and not excessive) levels of comparable property on the market that are competing with the subject property coming up for auction.

Do not overlook the advantages of auctioning a commercial property. Just make sure all the other existing elements are in support of that method of sale before you start.


Commercial Office Building For Sale Near Me Randburg

Not all Real Estate Commercial Property For Sale Near Me in Randburg should be auctioned, but the auction method of sale does have real advantages if the property is just right and the market is accepting of that method of sale. Here is why.

The key governing factors to determine if auction is a real chance or choice for the commercial property owner are the current levels of enquiry for that property type, and the prevailing business sentiment. If this is the case then you can look further at auction.

Industrial Old Factory For Sale

The auction method of sale is a proven time based sale process that flushes out the enquiry and if the investment property ticks all the other boxes such as acceptable (and not excessive) levels of comparable property on the market that are competing with the subject property coming up for auction.

Do not overlook the advantages of auctioning a commercial property. Just make sure all the other existing elements are in support of that method of sale before you start, which is why they use commercial business industrial property buildings for sale agents.

How Do You Select The Commercial Business Industrial Property Buildings for Sale in  Randburg?

Property For Sale

Many property investors choose industrial property as their first type of property investment outside of residential property. This then shows that the first time or smaller property investors believe that industrial property has key advantages for them.

The main advantage we can see frequently is that industrial property is relatively simple and basic when it comes to property performance. It is not hard for property investors to know what to do and what to control with property rents, leases, and property maintenance.

So what could be some other elements of industrial performance that are worth considering if you were and investor and you wanted to purchase a good property or something with real potential? Here is a list to get you started.

These are the most common points of concern and focus in industrial property that we come across as we speak to many investors, tenants, and real estate agents.

  1. Transport routes to the property and those that are used by a typical industrial tenant must be understood. The routes must be easily accessible as a system of raw material supply and product distribution.
  2. Many tenants need raw materials as part of their business operation. What are these raw materials and how easy is it for the tenant to get them? Look at the access factors for air transport, shipping and port access, together with freeways and the main road networks.
  3. The power to the property should be of the type that industry uses. In most cases that is what we call '3 phase' or 'high tension' power. It is the type of power supply that industry needs for large machinery function. If this power is not available you will have to assess how much it will cost to get it to the property.
  4. Cost and supply of labour force is important to industrial tenants. Invariably they will need people to work in the business. Proximity of the industrial property to local residential areas or towns will help with a source of labour supply; however another advantage with this will be access to public transport for the employees.
  5. Moving the end manufactured goods to their market is quite important to the industrial tenant. Today we see reasonable flexibility with truck transport and road networks however some very heavy or bulky goods will need rail heads as a point of distribution. Rail transport still has the advantage when it comes to large volume and heavy goods.
  6. Industrial property investment seems to be strongest in performance around major cities with established growth cycles. Even in a slow economic cycle these industrial properties will perform given the interaction with the community and reasonable access to end markets.
  7. In good property markets the industrial property tends to give higher levels of return when compared to office and retail property. This is an analysis on average so the other elements of location, tenant selection, and market access are still important to the equation. The industrial property market is still robust when economic cycles are positive.
  8. When economic cycles change to the positive, it is the industrial property that responds first even before office and retail property.
  9. Leasing industrial property is basic and simple. Vacancies are easy to manage providing the property is not too special in design that limits tenant usage.
  10. Rents are usually on a net rent basis and the tenants normally take responsibility for the payment of outgoings. In saying that, the landlord needs to ensure that they have a sound accounting process that checks the tenant in that payment cycle. The landlord does not need or want an unpaid account and fines applied thereto.
  11. When the property market is active, the pre-lease market on new industrial property construction is quite strong. It is the timing of the release of newer industrial projects that needs to be carefully managed.
  12. Owner occupation is an element of industrial property performance that moves in cycles. Reading, developing and selling into that property market can be lucrative. This also says that the owner occupiers of industrial property will also sell out of their owned property. Real estate agents can tap into the major businesses to capture this source of new industrial property listings.
  13. When the property market is 'strong' the yields achieved on well positioned industrial property at sale time are usually attractive for the seller. This does say that care must be exercised in having good tenants, great leases, great location, and a well maintained property.
  14. Buyers of industrial property come from two sources. That is the investor market and the owner occupiers. This provides versatility in property disposal if one market segment is slower.
  15. Corporate investors will move property in and out of the balance sheet as the company changes and repositions itself for business advantage. Monitoring the media for such changes will give investors a source of opportunity. The process of 'sale and lease back' is common in industrial property.
  16. Ample car parking for staff and customers
  17. Good loading and turning areas for trucks
  18. Functional office areas that support the warehouse operation
  19. Generous warehouse height and entry points for trucks and storage
  20. Security for the premises
  21. Access to quality business communication systems including telephone, data, internet, and mobile communications
  22. Good signage at the front of the property that gives the business a clear identity
  23. Proximity to services such as roads, transport, water, gas, electricity, and other industrial tenants.

These elements are the most common that we see in successful industrial property. Whether you be a real estate agent, a property investor, or a business needing a building to occupy, you can start with this basic list and add your special criteria to formulate the profile of a good industrial property in your area.

How Do You Quickly Determine the Value of Commercial Property for Sale?

Property For Sale

When salespeople start off their career in commercial real estate sales and leasing they seem to start working on industrial property first. Perhaps that is because the property type is quite simple and basic. That being said, there is still a need to understand the industrial property type and what the prospects in the market are looking for.

Every industrial property should be fully understood before action is taken in listing and marketing the property for either sales or lease. When you completely understand the industrial property it is a lot easier to make the marketing work for you and bring in the enquiry.

So let's say that you have a property marketing campaign running and you have some enquiry coming in. Asking the right questions of the prospect will help you move ahead in any property inspection if and when it is to occur. To help yourself here you could develop a checklist that you keep by the telephone and with you as you speak to other people and prospects making enquiries.

When it comes to industrial property, some of these factors will be important to the people that you talk to or that ring off the marketing of industrial property. Add these facts to other regional issues and create a list of items that help build your market share and convert prospects to the right properties.

Industrial property sales and leasing is not hard; it is just specialised and your questions and conversations with prospects should reflect that relevance.

Find All Real Estate Commercial Property For Sale Near Me in  Randburg

Property For Sale

Though it is certainly more common, and in many cases easier, to find deals with the single family houses, there are times when the opportunity presents itself to acquire a commercial property. And if you are a person who desires to pursue this venture, there are a few things you want to keep in mind when doing this. Following these simple steps can help speed up the process of getting some of these big deals in the pick line.

First, FFN offers a Commercial Property Boot Camp. This is a must if you want to pursue this arena of the real estate business. This course will teach you all the ins and outs of going through these business transactions. See the website if you want to know when the next one will be offered.

You will also want to keep your eyes open when you're riding around town, especially for fiz-bow signs (FSBO - "for sale by owner). If you see fiz-bow signs on big tracks of vacant land or any type of property, you will certainly want to call those numbers. When you are dealing with fiz-bow in the commercial property world, there is usually a reason they are trying to sell these properties themselves. And sometimes this can lead to some really good deals.

How to Find Strong and Accurate Comps for Commercial Real Estate

Industrial Land For Sale

The value of a commercial property for sale is determined by using some simple formulas that are based upon the amount of net operating income that the property produces each year. So when you are looking at a commercial property for sale, one of the first things that you'll want to ask the broker for is the profit and loss statement.

Some brokers who have listed a commercial property for sale may refer to this profit and loss statement as an IPOD, or income property operating data sheet. Once you get the IPOD, or profit and loss statement, you can then compare the information provided by the broker or seller to your other sources to help determine what the real numbers are. The challenge when looking at any commercial property for sale is that the broker and/or owner will often tend to exaggerate the amount of income that the commercial property for sale produces while also trying to minimize the amount of operating expenses that are reported.

How to Determine the Value of a Property for Sale

The reason for this is simple. The value of any commercial real estate is based on the amount of net operating income the property creates each year. In fact, each additional dollar of annual income increases the value of the property by roughly ten dollars, depending on where the property is located, and how old it is. Note that this extra net income can come from either getting additional revenue in rents, or from reducing expenses by managing the property more efficiently.

The final step in determining the value of a commercial property for sale is to divide the net operating income by the capitalization rate, which varies from about 6 to 12 percent depending on the type of property, the age, and the location of the commercial property for sale. The fastest way to get an idea of what capitalization rate you should be using when looking at a commercial property for sale is to ask another broker who is not involved in the transaction.

Using Escape Clauses to Limit Your Risk

Another way of protecting yourself when looking at any property for sale is to make sure that your purchase contract allows you a period of time to get out of the deal if you are not comfortable with anything that you find. Done properly, you can often tie up a property for 60 to 90 days so that you have time to accurately determine the real value. This makes it easier to look at commercial real estate, because you can get out if you have the right escape clauses.

Industrial Buildings For Sale

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