Buying and selling property is a major task. There's a lot at stake in the commercial real estate industry. Sellers may be looking to unload expensive properties for a profit while buyers may be looking for a long-term investment that makes sense for them from a business perspective. These deals are often complicated, not just because the properties themselves can be expensive, but also because buyers and sellers have to consider a lot more than price before taking the plunge.
To see an example, just look at the recent sale of the Bon Carre Business Center. After failing to draw initial offers, the complex was put up for auction online. Three days after bidding began, the auction closed with the 800,000 square feet building selling for $30.5 million. Although the $40 per square foot price tag may be appealing to some, others may be concerned that the massive center is only operating at 67 percent occupancy.
Some real estate and financial experts say that the purchase price was appropriate. They look to reports that indicate that the Center nets an income of almost $3 million per year. However, even that level of income may be difficult to maintain. The Center's 67 percent occupancy rate has decreased from former rates in the 90 percent range, and occupancy is expected to drop to 47 percent later this year.
However, as many of you know, the business world is all about vision and implementing appropriate actions to realize that vision. So, whoever takes over this Center may be able to increase occupancy and turn a larger profit than anyone thought was possible.
And therein lies one of the many challenges when dealing with commercial real estate. Those looking to buy or sell these properties need to consider every factor that may come into play. If they don't, they may wind up facing serious financial losses that could have been avoided. Therefore, to ensure that they are protecting themselves as fully as possible, these individuals should consider working closely with a legal professional who knows how to handle commercial real estate and the legal issues that accompany it.