Aiming for a Sale

Comprehensive and efficient property exposure is a primary function of the real estate broker. The property must be marketed reflecting its best qualities. An experienced broker with a financial background will draft a marketing brochure and distribute it to the investment community. The general items that are typically discussed in the marketing brochure include, but are not limited to:

• Investment summary and financial analysis 
• Loan/cash-flow analysis 
• Unit mix and income schedule 
• Location map with facility photographs 
• Facility features 
• Rent survey 
• Demographics 
• Competition map and analysis

To promote a property for sale, you need to know how to reach potential buyers. Who are the investors likely to be interested in your facility? Expertise in identifying the potential buyer is a critical brokerage function. Remember, exposure is necessary to selling the property. The marketing brochure needs to be exposed through the following basic venues:

• Direct phone contact and mailing 
• Industry conventions 
• Newspaper and magazine advertisements 
• Internet real estate websites 
• Broker network

Intelligent and competent buyers establish their financial goals long before a purchase agreement is executed. Be prepared to thoroughly review all aspects of your property with potential buyers. Here’s what they’ll be looking for:

• Confirmation of occupancy, rental rates and late fees 
• Physical inspection with a building inspector 
• Discussions with city planners to evaluate any future development of self-storage projects 
• Evaluation of delinquencies and auctions 
• Review of local Yellow Pages ads 
• Verification of fixed expenses 
• Certificate of occupancy 
• Other related city/county documents 

With any commercial real estate investment, the property value is based on economic occupancy, expenses, cash flow and net operating income. Certainly construction, rentable square feet and parcel size play a factor as well. Essentially, the amount of income that flows to the bottom line is the target for establishing market value. Steady your aim and your sale should be straight as an arrow. 

Stephen I. Grossman is the managing director and senior vice president of Lee & Associates Self Storage Investment Group, Newport Beach Inc. He has been responsible for the sale of more than 800,000 buildable square feet of self-storage and the sale or escrow of more than 2.5 million square feet of existing self-storage facilities. For more information, call 949.724.4709; e-mail sgrossman@lee-associates.com.