Commercial real estate investment sales refer to the transactions of commercial properties between buyers and sellers. As a unique asset with high value and low liquidity, commercial real estate transactions require professional brokerage services. Investment sales brokers play an important role in marketing properties, finding buyers, negotiating deals and closing transactions. With their market knowledge and financial modeling skills, they help clients maximize returns. This article analyzes the CRE investment sales from perspectives of brokerage firms, brokers, property valuation and due diligence.
Major commercial brokerage firms providing cre investment sales service
Many commercial brokerage firms have investment sales divisions, such as CBRE, JLL, Colliers, Cushman & Wakefield, Marcus & Millichap,etc. These large brokerage companies operate globally and have integrated services across property types. They possess extensive transaction databases and connections with property investors worldwide. Their senior brokers are capable of handling large portfolio transactions for institutional clients. Small boutique firms can also provide quality services with market expertise in local areas. They tend to specialize in property types and collaborate to meet cross-regional investor demands.
Responsibilities of an cre investment sales broker
The investment sales broker is responsible for valuing the property, creating marketing materials, contacting potential buyers, organizing property tours, soliciting offers, negotiating deals and coordinating the due diligence. Productive brokers develop clients via cold calling, networking and referrals. They must have sharp financial analysis skills, excellent communication abilities and comprehensive knowledge of the CRE market.
Valuation methods for pricing cre investment sales
Investment brokers rely heavily on the income capitalization approach to value commercial real estate, either using direct capitalization or discounted cash flows. The cost approach can also be applied for unusual properties. And the sales comparison method benchmarks value based on transactions of comparable properties. These valuations derive asking prices, guide negotiations and determine closing prices for investment deals.
Due diligence checks for cre investment sales transactions
Before closing a sale, the buyer’s team will conduct due diligence on finances, operations, leases, environmental conditions, property conditions and compliance issues. This involves checking historical financials, tenant credit, operating cost bills, audit reports, insurance policies and tax assessments. Physical and engineering inspections examine structural soundness. Reviewing ownership history verifies clean titles.
In the commercial real estate investment sales market, brokers play a vital role in connecting property sellers and buyers. Their services add value for clients on both sides through marketing, valuation and transaction management. Due diligence checks also protect parties’ interests in these significant deals.