Why lease your commercial property before selling?

Why lease your commercial property before selling?

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Following is the video transcript.

When property buyers consider a commercial asset, they first need to satisfy lenders that their acquisition will be a profitable investment. Most financiers like to see a lease profile of at least two years for a commercial property. 

A locked-in lease offers a lower degree of risk and a more guaranteed income stream to ensure the investment is viable and the buyer can sustain their mortgage repayments. 

Importantly, when selling your commercial property, the terms and length of the lease are important to the purchaser. A fully tenanted property usually attracts a higher sale price, whereas a commercial property with vacant space gives the buyer an opportunity to negotiate the price down. 

To mitigate this, you could consider offering a rent guarantee to the buyer for a fixed period, giving the new owner time to find a suitable tenant. You are then protecting the yield and able to achieve the highest sale price. 

At Herbert Commercial, we are experienced in helping owners increase the value of their commercial property and find quality tenants ahead of a sale. If you need help with your commercial property, give us a call. 

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