The time a commercial property can remain on the market between tenants varies – often a factor of rent, size, property class and owner motivation – but it is not uncommon for properties to pass the year mark before regaining occupancy. In fact, complex negotiations can cause the process to drag out further, leaving owners to wonder about the best way to secure a lease and ensure profitability.
Recently, a trend has emerged that may create new opportunities for assets with greater time on market. Rather than simply placing “for sale” signs out front and hoping for qualified buyers, some owners are turning to commercial auctions.
What was once a tactic used primarily for distressed properties as a way to offload problematic assets has become a more viable strategy for all types of property. In fact, Midwestern auction firms are now handling the sale of hospitals, offices, daycares, development ground, strip centers, aquatic facilities, and more through auction. What’s more, recent reports from Auction.com show that commercial real estate auctions have generated a higher sales price than they would have in a traditional marketing process.
In an effort to assuage concerns and attract buyers, the majority of commercial real estate auctions offer potential investors the opportunity to conduct physical inspections and review due diligence documents. This, partnered with the fact that it is very rare for auction participation or bidding to come at a cost, creates strong opportunities for commercial investors to find great additions to their real estate portfolios.
While a winning bid may trigger the need for a good faith deposit, this practice protects both sellers and bidders by legitimizing the bidding pool. Sellers don’t have to worry about whether bidders are serious, and investors know they’re bidding against genuine competition.
To learn more about the process involved in commercial real estate auctions – either as a seller or investor – reach out to Intelica Commercial Real Estate. Our team of professionals can help you determine the best opportunities for sale or purchase in a dynamic real estate market.