228 Valencia Ave | Coral Gables Office Building Under Contract
I am very pleased to announce that my firm has just recently put a small boutique office building in Coral Gables under contract for our client. After it was all done, I found myself questioning how the Buyer intends make the existing structure profitable, especially with an existing tenant.
To start, the process was anything but traditional, with multiple offers, and quickly became a bidding war. I realized after many decades of selling bricks and mortar, we brokers need to rethink the process before we can ensure that we are giving our clients the best advice on value.
Most of us with a little gray hair were trained to research comparable sales or cap rates, but have you ever sold a really small building on a really big piece of land?
The world around us has changed, and now you must ask yourself:
👉 Are you selling the existing structure, or is there some value in the undeveloped or underutilized area of the site?
👉 If so, how much is it worth?
To do it right, this would entail another skill set of understanding zoning, modeling the potential, pricing the additional square footage, setbacks, parking. What if the site is infill and in a densely developed area? Good luck in finding any land comps or understanding overlays.
I imagine it can be almost overwhelming to the point where you pay to call in the experts?
We brokers provide a valuable service, but it would seem here that you need to be a jack of all trades, or have some hands-on experience. This is a question that is not so easy to understand… it requires some very specific knowledge that isn’t in our handbook, or some special skills that many brokers who haven’t done development work just don’t have.
I am sure that many of you have had this situation, and we all need to prepare for it. As our land becomes more scarce, and prices are outpacing investment returns, it is forcing us to look a little further into the future for potential, and a little deeper into the different markets for understanding than we have ever before.
Something for you to think about, and I would love your secrets… because I am sure it will happen again!
Well, on this one, we got lucky and they went under contract at a price that covers both.
#CRE #CommercialRealEstate #DevelopmentOpportunity #BrokerInsights #CoralGables #UnderContract #RealEstateStrategy #ValueBeyondTheStructure