Help! Can't Sell/Lease NM office bldg - Posted by Holly

Real Estate Investing Office
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Posted by Nate(DC) on August 05, 2002 at 12:32:17:

My thoughts:

Sounds like the agent may not be doing her job too well. She knew what the location of the property was when she took the listing. If she can’t sell that property, at that location, at that price, she should have told you so up front and let you either pick another agent who thought they could, or recommended an adjustment to the price or terms so as to make it competitive.

I don’t think the national ads are useful. Roswell is probably too small to attract interest beyond its local area.

I think a targeted direct mail campaign would be a good idea. Or perhaps large ads in the local newspaper. Try calling the local Chamber of Commerce and Economic Development offices. They often know of, or can at least keep an eye out for, businesses that may be relocating or expanding. Also, you may want to see if the location is more appropriate for a different type of market. Roswell is about 50% Hispanic. Maybe your location is too far out for a white-collar office, but would be good for a Mexican grocery store or something like that. See if there’s a Spanish language newspaper, Chamber of Commerce, or realtors in the area that you could go after.

And don’t worry about being far away - those can all be done by mail and phone, and frankly, are the kind of the stuff the agent, if she’s doing her job properly, SHOULD be doing anyway. Don’t feel bad about calling her up and giving her suggestions - after all, whatever she’s doing now isn’t working.

Good luck. Let me know if I can advise in any other way.

NT

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Help! Can’t Sell/Lease NM office bldg - Posted by Holly

Posted by Holly on August 02, 2002 at 08:18:03:

Hello --My family and I own a commercial office bldg. in good shape in Roswell, NM. We are having a horribly difficult time trying to sell it – it’s not in the center of town and it currently has no tenant, although it’s a very nice bldg. There is no mortgage on it but the insurance is costing us as it’s sitting empty. None of us live in the State and it’s currently being looked after by an agent.

If anyone might have any creative ideas on ways of both finding a tenant and a buyer, I’d really appreciate hearing them. We’re already prepared to carry a note for a deposit to broaden the field of buyers. It seems that most investors want a building with an income already in situ. Here are the specs:

3200 sq ft
10 private offices
reception/secretarial area
additional office area
conference room
C-2 Commercial zoning
11,700 sq ft - lot size
18 space parking lot
Rent (most recent): $1200/pm
Taxes: $1,130/yr
Asking price: $115k

Thank you in advance for any input!!

Holly

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Re: Help! Can’t Sell/Lease NM office bldg - Posted by Nate(DC)

Posted by Nate(DC) on August 04, 2002 at 17:58:52:

Holly,

When we last spoke on the board in May, you had reduced the price to $99,900 after I told you it was overpriced.

Now you’re back to $115,000. You’re moving in the wrong direction!!!

Also, as I mentioned in my earlier messages to you, I think you are using the wrong approach by looking for an investor to buy this building. Given that the building is in a small market, and it’s vacant, I couldn’t see an investor being interested unless you were giving a SEVERE discount. After all, risk and return have to be correlated, and the fact that this building is vacant, in a market where it could be hard to fill due to the sheer small size of the market (as you have experienced, trying to rent it out), means that to an investor, buying this building would be a very risky proposition. So to get someone to do it, you’d have to offer them a very attractive return - i.e. the opportunity to buy it at a low price or with very aggressive terms. For example, sales price of $50,000, with $1,000 down and the balance financed at 0% interest for 20 years.

Sound palatable to you? I didn’t think so.

That’s why I think you’ve got to target an end user. Find some small business that needs space and go after them. According to the 2000 Census, Roswell has 45,000 people in it. Surely one of them needs some space for some sort of business or enterprise.

You said the property was being “taken care of” by an agent. Do you actually have an active contract with this agent to show and sell/rent the property? If not, why not? If so, you should be asking the agent why they are not succeeding. Please do so and let me know what they say.

NT

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Re: Help! Can’t Sell/Lease NM office bldg - Posted by Holly

Posted by Holly on August 05, 2002 at 05:15:44:

Hi Nate,
I know – you’re right, you’re right! I guess I should have clarified
the $115 asking price, though I don’t suppose it makes much difference.
It is still officially listed with the agent at $99.5 for the remainder
of her contract - a couple more months. I’ve run some ads in a few
national papers asking $115 and
saying owner will carry note for deposit - assuming we settle for 85-90
down and carry a note for the rest.
I’m sure you’re right about the end-user and it did make an impression
on me when you mentioned that a few months ago, I guess we’re just up against a logistical problem: I live in England and my brothers - who I also own it with - live on the east coast.

We do have an agent from Century 21 managing it. She claims the location has held it back from a sale, which may be at least partly true. I don’t really think she’s very aggressive though. That said, she’s trustworthy and keeps the place tidy and vaccumed. There does seem to be viewings on it but we haven’t had an offer in ages.

Perhaps I need to do some kind of targeted direct mail campaign to Roswell business/residents. That and lower the price further…?
Thanks for your input!!