How to Market Commercial Real Estate for Sale or Lease

To sell or lease a commercial property as a real estate agent you have to tap into the target market and do it well. This says that you have to understand that target market in your location before you start the process of promotion. To define a target market is sometimes hard given the relative property.

Ask yourself these questions:

What media will reach the target market in a direct and sustained way?
What is the best time to promote the property to the target market?
What is the capability of the target market to act and purchase the property at the moment?
Why would the target market buy or lease such a property now or at any future time?

These questions lead to critical decisions to market the property. Today we have a selection of media to choose from; some of which are more effective than others.

Consider these alternatives of marketing a commercial property for sale or for lease.

Newspaper
Internet
Database
Direct mail
Direct telephone contact
Signboards
Neighbouring property owners
Businesses in the area
Email
Promotional flyers
Radio and TV

So what method is best? Only you can make that decision when you know what your target market is. The seller of the property should be fully briefed about your definition of target market before you ask for vendor funds to market the property.

It is wise to have a series of say 3 marketing packages from which the client can make a choice. The logic of gold, silver, and bronze marketing packages to promote a property for sale or lease is productive and sensible. At the end of the day the vendor should be asked for promotional funds but in doing so they should be given a choice of how much to spend and in what way.

The internet today is playing a significant part in the promotion of property. It is cheaper but available to all in most marketing campaigns. It has a sustained promotional life and has the ability to capture enquiry for many weeks.

When the enquiry starts to come in, it should be captured and categorised. The value of a great database of buyers, sellers, landlords, and tenants is high in the operation of a real estate office. The more people you know the better the listings and enquiry will be. This is where a team of good salespeople all running an accurate database of well qualified prospects can make a significant difference in the market place.

John Highman is an expert real estate author, conference speaker, and coach. He helps Real Estate Agents globally to improve their property business, market share, listings, and commissions. John is a successful real estate agent himself and has been so for over 30+ years.

Do you want to improve your real estate business or team? You can learn how others have done that right here http://www.commercial-realestate-training.com

Commercial Real Estate Cash Flow Funding System

How To Buy Commercial Real Estate With No Cash or Credit. Learn The Secrets Insiders Never Share. (Apartments, Office Buildings, Hotels, Mobile/RV Park) Course Includes Everything You Need. Create A Cash Flow Of $25,000+ Within 90 Days! Updated for 2011.

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Commercial investment real estate in the area of Metro doubles over 2009

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Print?? Email?? Font ResizebusinessInvestment in commercial real estate in metro area doubles over 2009By Margaret Jackson
The Denver PostPosted:?12/26/2010 01:00:00 AM MST
After a few years of dismal commercial real estate sales, investors are snapping up property in Denver. (John Prieto, The Denver Post)

Investment in commercial real estate in metro Denver more than doubled this year over 2009, a sign that the market may be on the mend.

So far this year, investors have spent $1.01 billion on 54 office, retail and industrial properties, according to an analysis by Cushman & Wakefield. In 2009, they spent $448 million in 30 transactions. The data include only deals valued at more than $4.5 million.

"The spotlight is shining pretty brightly on Denver right now," said Peter Keepper, principal of Essex Financial Group. "Denver has consistently been in the top 10 markets for preferred investment."

Last year, about $52 billion worth of investment real estate traded hands nationwide, way down from its peak of about (The Denver Post)$500 billion in 2007, said Mike Winn, executive vice president of the capital-markets group in Cushman & Wakefield's Denver office. Up to $150 billion worth of real estate deals are expected to close by year-end.

"We expect the market to normalize to where transaction volume will be $200 to $225 billion in a year or two," Winn said. "We're not going to go back to $500 billion. That was just an unbelievable time in the market."

Though the number of deals closed may not near that of the buying frenzy of 2007, Denver investment properties are commanding record-setting prices.

The 500,000-square-foot 1800 Larimer building is expected to fetch more than $200 million, or $400 a square foot. That would set a record on a per-square-foot basis for an office building sold in Denver.

"That will be stellar pricing," said Mary Sullivan, executive vice president in CB Richard Ellis' investment-properties institutional group.

So far, the biggest deal to close this year was the sale this month of Granite Tower, a 561,691-square-foot office building constructed in 1982 at 1099 18th St. It sold for $149 million, or $265 a square foot, to KBS Real Estate Investment Trust II.

"For a building of that age, vintage and location, that is record pricing," Sullivan said.

Other big deals completed this quarter are the sale of Broadway Station to Walton Street Capital for $49.5 million and the Promenade Shops at Centerra in Loveland to New York private-equity firm DRA for $75.5 million.

"It's nice to see larger deals getting closed," Winn said. "It's just another indication that the market is much more liquid than it was one short year ago when it was frozen on an international basis."

The Promenade Shops went into foreclosure after lenders on the project decided not to extend or refinance the construction loan on the lifestyle center. The developers owed nearly $113 million on the $116 million loan.

The appetite for investment properties has been growing since the end of last year as pension-fund advisers and life-insurance companies scour the country for prime real estate.

But there were so few assets listed for sale during the first half of the year that buyers were paying a "scarcity premium" for stabilized assets, Sullivan said.

Now, as owners are seeing that there are plenty of potential buyers, properties are being offered for sale and investors are gobbling them up.

"Values are exceeding pricing that was paid at the peak of the frenzy," Sullivan said.

Most life-insurance companies nationwide have increased the amount they're allocating to real estate by as much as 50 percent for 2011 because alternative investments such as bonds aren't yielding high returns, Keepper said.

At the same time, loan originators that package commercial loans as mortgage-backed securities are starting to come back. Known as conduit lenders, they sell the packaged loans in the secondary market.

"They don't keep the loans on their balance sheet," said Ed Boxer, a principal at Essex Financial Group. "(Conduit lending) is coming back, which is good news. It will bring liquidity to commercial real estate."

At the beginning of the year, there were only about four conduit lenders originating loans, down from about 30 at the peak of the market, Keepper said. Now there are about a dozen.

"What we'll see next year is more institutional sales of core assets and more distressed sales from banks," Keepper said. "They'll finally cut bait on some of these loans where they should have taken the property back instead of giving the borrower an extension."

Margaret Jackson: 303-954-1473 or mjackson@denverpost.com

Top 5 commercial real estate deals by sector:

OFFICE

GRANITE TOWER, 1099 18th St.

Sale price: $149 million

Square footage: 561,691

Price per square foot: $265

RE/MAX INTERNATIONAL HEADQUARTERS, 5075 S. Syracuse St.

Sale price: $75 million

Square footage: 248,493

Price per square foot: $302

BROADWAY STATION, 900 & 990 S. Broadway

Sale price: $49.5 million

Square footage: 317,224

Price per square foot: $156

161 INVERNESS, Englewood

Sale price: $48 million

Square footage: 216,459

Price per square foot: $222

LOWRY MEDICAL CENTER, 8101 & 8111 E. Lowry Blvd.

Sale price: $30 million

Square footage: 112,155

Price per square foot: $267

RETAIL

PROMENADE SHOPS AT CENTERRA, Loveland

Sale price: $75.5 million Square footage: 504,670

Price per square foot: $150

MEADOWS ON THE PARKWAY, 4800 Baseline Road, Boulder

Sale price: $30.8 million Square footage: 207,641

Price per square foot: $148

EDGEWATER MARKETPLACE, 1711-1931 Sheridan Blvd.

Sale price: $22 million Square footage: 145,780

Price per square foot: $151

TINSELTOWN USA, Colorado Springs

Sale price: $15.3 million Square footage: 79,444

Price per square foot: $192

MISSION COMMONS SHOPPING CENTER, Arvada

Sale price: $14.4 million Square footage: 117,664

Price per square foot: $122

INDUSTRIAL

BROOMFIELD CORPORATE CENTER, Building 2, 11525 Main St.

Sale price: $12.9 million

Square footage: 92,800

Price per square foot: $139

DENVER BUSINESS CENTER Buildings 1-3, 11101-11111 E. 53rd Ave.

Sale price: $9.9 million

Square footage: 288,390

Price per square foot: $34

DENVER DISTRIBUTION CENTER, 11600 E. 56th Ave.

Sale price: $9.3 million

Square footage: 210,600

Price per square foot: $44

ROCKY MOUNTAIN BUSINESS CENTER, 13250 E. Smith Road, Aurora

Sale price: $7.8 million

Square footage: 136,828

Price per square foot: $153

CONCORD BUSINESS CENTER Phase II, Building 2, James E. Casey Avenue, Englewood

Sale price: $7.6 million

Square footage: 85,008

Price per square foot: $89

Source: Cushman & Wakefield

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