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Properties with commercial leases attract various buyers

| Feb 21, 2019 | Commercial Leases

When people sell their non-residential properties in Los Angeles, their main goal is to sell their properties for the most money possible. They also want to complete their transactions quickly and with few conditions. However, what complicates transactions involving properties featuring commercial leases is that commercial offerings have several potential buyers with varying pricing expectations. Here is a glimpse at who a couple of these buyers are.

The first type of buyer is the developer. Developers target properties that can be used for new construction or properties they can demolish and rebuild. A critical part of these buyers’ pricing is what they estimate the ultimate value of a newly constructed property to be — either its sales price or its rent price. As a general rule of thumb, developers want properties at low prices.

A second type of buyer is an investor. Investors generally value for-sale properties’ streams of income based on how tolerant they are of risk. In other words, the greater the risk associated with a property, the less that investors will want to pay for it. If a property is vacant, an investor may still be willing to purchase it, but only after figuring out how much originating a lease will cost him or her. These buyers are usually willing to pay prices for properties that are in the range of low or low-medium.

Selling a property featuring commercial leases in California can understandably be exciting, but it can also be a complex process from a legal standpoint. Fortunately, an attorney can guide a seller through such a transaction. The attorney’s goal is to make sure that the seller’s best interests are upheld during all stages of the deal in Los Angeles.