I'm under contract on an 8700 sq. ft. office building and need help with marketing. I can run numbers all day long, but I'm not great at the marketing side of things. Here's the details:
1) A local nonprofit is consolidating three offices in to one. This is not the one. The building will be empty at the end of the month.
2) The seller started looking for a tenant, but a BP contact let me know he'd be interested in selling and knew I was interested in more commercial space (power of BP networking!)
3) My financing is contingent on revenue which is contingent on finding a tenant.
4) My realtor is a nice guy, but very busy. There's a listing online and a sign in front of the building (very high traffic count road for our area).
5) I have until October 24th to secure a tenant to get my financing to close on the deal.
6) The building has been leased to one tenant. Prior to that it was leased to 4. It has parking for 60 vehicles, a diesel generator, a mix of small and large offices, a large meeting room, and a large kitchen. I'd prefer one NNN tenant, as piecing together several tenants in a compressed time period could be tough.
My current thoughts and questions:
1) Where would you put listings online? Loopnet, Facebook, Linkedin, Craigslist, BP, others?
2) I'm developing a target list of law firms, engineering firms, medical, call centers, nonprofits, and accounting firms that I will contact directly. But how do I find the right person? Phone? Mail? Email? Other industries? Other methods?
3) I have good relationships with local power brokers and influencers (in our small area of the world) and will be meeting with them to discuss possible tenants.
4) What else am I missing?
Thanks in advance for your help!
It needs to be listed on Costar with a competent Commercial broker....that is where most of the real players/brokers look. Of course, getting tenants to sign a contract contingent on you being able to buy it will be an issue.
Is the building able to be converted to flex space? you may be successful listing it as that. Throw a loading dock and being able to convert part of the building to open warehouse could benefit you. As far as listing goes I list all of my office space on craigslist and surprisingly most of my small tenants have come from there. As far as all of the listing websites unless you pay its not worth it. Another strategy is looking at comparables, I am sure you have a list of comparables from the appraisal of the building. Call the tenants and see if they are fed up with their current landlord.
I would say do all of the above, in order, at a measured pace. Until you know your product type and local market, no one can speculate on the best "bandit" ways of marketing. For a small space, would you offer increased tenant rep commission? I've seen that as a way to steer tenants into smaller spaces. Brokers like to talk about that crazy landlord offering 8% or something.
Thank you, everyone. @Ronald Rohde , I'm going to be that crazy landlord! No tenant, no deal.
How active is your market? What would be a typical lease up time for something like this? It is not crazy to think that suburban office (guessing based on size) to take 6-12 months to lease particularly without a broker who already has these types of connections in the market.
A lot of my investment strategy involves purchasing underleased properties to value-add but we typically already have the tenants in our back pocket before tying the property up to avoid spinning our wheels and wasting a bunch of time while also upsetting the seller if we cannot perform.
Have you discussed with the seller what you need to do in order to get financing ahead of time? Might be viable to propose a few different options including a cash price and a seller finance option if they would consider it? Who are the office tenant rep firms in your area? That would probably be the best place to start.