Description

In this video Josh discusses his recently closed listing 154 Center Street, Groveland, MA. A 7,200 SF industrial property that he successfully took off the market. Zoom Highlights: Jeremy: I wanted to catch up this morning and talk about Groveland. You just closed on a sale there. It was a business owner who sold his company, and came to us because he had the industrial building where he was housing his company left over and wanted to get rid of it. Josh: He owned this company and he owned the real estate together. He operated his company out of the building and then ended up selling the company, and so he was stuck with the real estate. The lease was ending for the company. That company was then purchased by another company and they were planning on moving out of the property, so he was going to be stuck with vacant property in about six months from the time we took it on. Josh: Basically he had attempted to market it himself, and was just getting bogged down with a lot of tire kickers and low offers, and was just unhappy with the market and how they were coming to him. He wanted to get some professional help, and so we took him on as a qualified seller. We met with him, we brought him through our process, and determined that he was a qualified seller. Jeremy: What you're saying is this guy had sold his company, the company that bought his company signed a lease for say six months while they transitioned the operations out of the building, so he was facing a looming vacancy. He no longer needed the building, so he tried to market the building himself, find buyers, and ended up with a lot of tire kickers, people who were coming in, making lowball offers, really spinning his wheels and wasting his time. Would you say that the sale of this piece of real estate in Groveland was critical to his retirement plan? Josh: It was. He was going to be stuck with an asset with negative cash flow, and he wanted to sell the property to be able to retire with his wife, actually. Jeremy: Interesting. He had successfully sold the company, which is not easy to do, then he had the building left over. Needed to dispose of that so he could transition the equity, this was a big deal for him and get as much capital out of the property as possible, so he could retire with his wife? Jeremy: After trying to do it himself, he hired our team, and you spearheaded the effort to take them through our sale process. Tell me what happened when you went to market. Josh: We went to market and we had a lot of good activity. There were a few lowball offers, but essentially we sourced four offers on the property. All of them were above what he was actually looking to get, and we ended up selling on a deal with a direct user. During that time there was some difficulties, and that deal ended up falling through. Through our continuous marketing period, we were able to set up a new deal within 30 minutes of the old one falling apart. Jeremy: In terms of the sale price, so the high to low, he had gotten offers on his own. What was a typical offer price he was seeing in the market for his building? Josh: When he was trying to market it himself, he was seeing offers from 700,000. Someone offered him 500,000 and they were all under a million, which he wasn't too happy with. Jeremy: 1.25 was the final sale price, so he ended up selling about 500,000 to 750,000 over the lowball, time-wasting people that were coming to him. Maybe they sensed that he was motivated, not in the right way, to exit the building, because he had sold his company. Maybe he was showing some of that to the market, that he was nervous, and they were taking advantage of that. Having us run the process and be his intermediary and representing him, we were able to protect his interest from the market seeing those things and then negotiate the highest value. An extra half a million in his retirement with his wife, a big deal for this guy, right? Josh: First-time seller, very nervous. I think some people sense that, try and take advantage of that. He was scared of making a mistake, because this was a significant transaction for him. This was his retirement, and he didn't want to mess that up. Jeremy: Yeah. It's not uncommon. We see one of the primary reasons why people end up selling a piece of commercial real estate is because they've sold, closed or relocated their company. This was exactly one of those reasons why. He's not a professional commercial real estate investor. He doesn't do this every year or three years or five years. This is the kind of thing where he has a facility that is now surplus and he needs to sell it, but it goes into the whole picture of maximizing his returns, getting as much money out as possible, because this is a direct investment for this gentleman, and making sure that he realized the full market value of the property was essential to him feeling confident about his sale.