The vagaries and unpredictability of the commercial real estate market are known to all. There may be times when commercial property rates skyrocket and at others, the value of the same properties come down to affordable levels. Buyers have an edge in a slow market as there is a surplus property for sale. However, the decision to buy a commercial property in a slow market should be taken smartly and the following factors must be considered carefully:
Do your Homework
A slow market is a golden opportunity for buyers but that doesn’t mean you can skip due diligence. Make sure you tick all the boxes of a commercial property search by scanning the internet for listings and checking with your commercial property consultant to gain insights about the neighboring area. This research will help you ascertain the best price for your chosen property and act as a starting point for sealing the deal.
Consult Commercial Property Experts
The help of a knowledgeable and experienced commercial real estate consultant is strongly recommended for any property transaction, even one to be made in a slow market. They can help you identify distress sales or good bargains that you may not come across on your own.
Consider Multiple Options
A slow market entails excess supply and insufficient demand giving you the chance to consider several options. While shortlisting options ensure not sticking to a specific property but consider alternative options to get the best value for your investment.
Visit the Property Site
Even if you are tempted to quickly seal the deal due to the lure of low prices, don’t skip a visit to the site of the property with your CRE expert who can evaluate and check its actual value. Don’t forget to check if the title of the property is clear and related documents are in place and complete as per laws.
The upside of a down market is that the buyer is spoilt for choice. Even if you are not able to land the first deal, don’t be afraid to walk away, and look at the next commercial property on your list. Never forget that in a slow market, the buyer has the power, so stick to your guns and negotiate the deal on your terms.