In 2005, I wrote an article entitled “the Art of Pricing a Deal.” At that time, I stated the risks of overpricing a commercial property were that it ultimately led to a lower sales price and a loss of valuable time. Today, I have heard several theories that a property listing should be priced at 25-30% above its value, as a buyer wants to feel like he or she is receiving a steep discount. I think it’s time to dust off my old article, as properly pricing a commercial property listing is even more relevant today.
In the last two years, the average selling price of my commercial property listings has been under 12% from the original asking price. With today’s reduced asking prices, it would be even lower. Currently, I try and price my listings at even less of a spread: about 10% above where I expect them to trade. This seems to generate the most activity as buyers are focused on the best priced listings.
Pricing a commercial property right and taking an aggressive, proactive marketing approach will generate multiple offers today. The days of posting a sign on a commercial property and placing a NY Times ad are over, as the information must be sent out to the masses, the brokerage community, and online listing services such as LoopNet.
There are literally thousands of buyers waiting to pounce on the right opportunity. In this market, I believe buyers feel like there is safety in numbers- if someone else is bidding on it, the listing must be an opportunity. One such case is a former convent that we have under contract in Chelsea. We brought the property to market earlier in 2009 for $3.95m or $619/sf. We received a dozen offers early on between $2.5m-$3.5m. Then we had an asking price offer submitted. As soon as other buyers were made aware of the interest, two more asking price bids came in. Having multiple bidders is essential in any market, as without leverage it is virtually impossible to get a buyer across the finish line.
In all, buyers are willing to bid up to and above the asking price today. They are savvy enough to realize that the discount off an ask doesn’t necessarily equate to a bargain. Furthermore, they choose to focus on the properties priced well and overlook the rest.
What are you seeing in your market? I invite you to weigh in and share your commercial property pricing strategies.
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Guest Blogger: James Nelson, Partner at Massey Knakal Realty Services, New York
James Nelson has been involved in the sale of more than 150 properties with an aggregate value of over $1 billion since 1998. With the exception of the Founding Partners, he has been the company’s top salesperson for the last three years. Currently James is handling over 40 properties with an aggregate sales price of around $300,000,000.
http://www.masseyknakal.com/people/JNelson
Friday, February 05, 2010
Tuesday, January 12, 2010
LoopNet Offers the First Commercial Real Estate Search App for iPhone Users
Want to be able to search for commercial property anytime anywhere? There's an app for that!
Download the FREE LoopNet iPhone App today.
(iTunes required)
Download the FREE LoopNet iPhone App today.
(iTunes required)
We're ecstatic to be the first to offer CRE professionals easy access to all 745,000 commercial listings on LoopNet.com from anywhere at any time - with technology that suits their busy on-the-go lifestyles. The LoopNet iPhone App was just approved and is now available in the iPhone App Store making it the first Commercial Real Estate Search Application.
With just a tap you can now explore properties in your immediate area, filter through results, get driving directions to a listing and contact the listing broker.
LoopNet iPhone App features:
- Location Finder: explore properties in your immediate area using the iPhone's built in GPS capabilities
- Custom Search: filter results by price, building size and property type (office, industrial, retail, land, multifamily, etc.)
- Driving Directions: use Google Maps to plot properties or email directions to a friend.
LoopNet's FREE Basic Membership lets you search hundreds of thousands of properties for sale and lease. Premium Membership delivers full access to the entire property database.
Check out the screenshots of the LoopNet iPhone App and let us know what you think.
Property Search
Map Search Results
Search Filters
Property Profile
Property Photo
Contact the Listing Broker
Monday, January 11, 2010
LoopNet Community Involvement... what a year!
2009 marked LoopNet’s highest Community Involvement participation output to date! In fact, LoopNet employees logged more than 1,042 hours of service, benefiting more than 40 organizations through donations and volunteer efforts.
Here are some of our accomplishments for 2009:
- Raised nearly $10,000 for the
- Donated 100 toys to children of The Edgewood Center of SF for the Annual Holiday Toy Drive; adopted 3 families for the Christmas holiday.
- Cooked 515 pounds of homemade goodies (mashed potatoes, yams, stuffing, cookies, & macaroni and cheese) to feed 1200 homeless people for Thanksgiving in the Park.
- Collected $3,000 worth of school supplies and funds for underprivileged school age children.
We are hoping to make 2010 an even better year!
Monday, December 21, 2009
LoopNet Success Story
When Joe DeCollibus, with Miami Provisions, set out to lease a warehouse in
Setting up a Saved Search & New Listing Email Alert allowed Joe to easily stay updated on newly added listings that matched his search criteria - there was no need to log in and conduct a new search everyday. He was also able to research the local demographics for each listing, giving him additional information to make a more informed decision.
“LoopNet is helpful in so many ways. It is a great tool. I will never look for another property without the use of LoopNet. It allowed me to do all the necessary research to find the right property for me.”- Joe DecColibus
Do you have a success story you would like to share? Submit it today.
Oh, CRE: a holiday parody of the song "O Christmas Tree"
Boy has it been a tough year. Let's hope 2010 is a lot better. Until then, check out this video and have a little laugh:
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