Dealing with Commercial Real Estate Opportunities

Dealing with Commercial Real Estate Opportunities

For our latest webinar, Glen Cooper joined us to continue his series on The Nuts & Bolts of Selling a Business. In Part 6 of the series “Adding, Analyzing & Presenting the Real Estate: How We Can Combine the Business and Real Estate When the Opportunity Presents Itself,” Cooper covered key facts that business brokers and M&A advisors need to know when looking to optimize their opportunities with seller real estate.

Part of this webinar included how to present real estate in an Offering Summary. He also went over pointers for how to best assist sellers in determining the price of their real estate and several essential tips designed to help business brokers deal with commercial real estate without having to become experts in the process.

Cooper feels that it is quite important for business brokers and M&A advisors to understand how to deal with commercial real estate for many reasons. Obviously, you can profit from being involved in the transaction, so it is well worth your time.
However, during the webinar, he also pointed out that it is also important to know what mistakes to avoid and what not to do. As he explained, business brokers are storytellers. They tell the stories of businesses. Quite often, a key part of the story can be found in the business’s real estate.

He noted, “Sometimes the seller doesn’t quite realize that their business has a story, but buyers want to hear a story. Buyers want to know the history of the business and how they’re going to fit into the story of the business.” He believes that you should include the real estate in the confidential business review or Offering Summary.

Importantly, Mr. Cooper emphasizes that you shouldn’t try to “wing it” and list a seller’s commercial real estate if they are not prepared to deal with the various technical aspects involved. Commercial real estate can be quite complex. It has become even more complex with the passing of time. That means that before listing this kind of real estate, you must be prepared to deal with a lot of nuances.

In terms of dealing with a seller’s commercial real estate there are many steps that can be taken. For example, in the summary listing sheet, it is possible for prospective buyers to look at the executive summary and see a few paragraphs describing the business as well as information on associated real estate.

When discussing real estate, Cooper creates diagrams of the real estate including information such as square footage, zoning, warehouse information and more. The idea being that a prospective buyer can quickly learn a good deal about the property and how it fits into the larger framework and picture of the business. As he notes, commercial real estate has a slew of variables including the businesses’ location and getting a professional appraisal of the real estate. He cautions business brokers and M&A advisors, pointing out that unless they are a qualified real estate appraiser that the appraisal should be left up to an expert.

In our next article, we will dig deeper into Cooper’s tips for navigating the world of commercial real estate. While there are significant opportunities for business brokers in listing the commercial real estate of sellers, there are also a diverse range of concerns that must be addressed.