Choosing the right time to sell a commercial property can have a large impact on your success. Use our guide to help you judge the right time to market and sell your commercial property.
According to Michael Bull, president of Bull Realty Inc, commercial property values continue to be cyclical. There are four phases to the commercial property market cycle; Recession, Recovery, Expansion and Contraction It may be useful to identify which stage we are in the cycle in order to establish whether it is a good time to sell a commercial property.
The worst time to sell your commercial property would be during the Recession Phase when the property prices are the lowest and financing availability becomes unaffordable for many. This often results in the consequential loss of tenants and commercial property owners struggle to find occupiers. It might sound obvious but if the bottom of the cycle can be avoided, the loss of profit or capital can be minimised. This, however, may be a great opportunity for buyers to secure prime locations.
Selling during the Expansion Stage, when financing has become affordable, will encourage stronger bidding and increased selling prices. During this phase, it may be more difficult for buyers to secure a property that they really want as there is higher competition with other commercial property investors pursing the same properties.
During the other two phases, the selling decisions should be based on need.
You should seek professional help from a commercial agent who will be able to help you identify whether the yield curve is contracting or expanding. This has a direct affect on corresponding property values.
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