When Is the Best Time to Sell My CRE Portfolio

Businessman analyzing real estate market
July 10, 2023

As a commercial real estate investor, property manager, or owner, you may have invested in a CRE portfolio that has proven to be a profitable long-term strategy. However, at some point, the question of when to sell may arise.

Unique Properties, Inc. understands that knowing the right time to sell your CRE portfolio is just as important as knowing when to buy. In this article, we will explore the factors that should be considered before deciding on the best time to sell your CRE portfolio.

Important Considerations that Determine When to Sell CRE Portfolio

Important considerations that determine when to sell your commercial real estate portfolio include:

1. The Current Market Conditions

Do a market analysis and evaluate the current market conditions before deciding when to sell your CRE portfolio. If the yields on your CRE portfolio are set to decline or remain stagnant in the future, consider selling your commercial real estate portfolio now to lock in a profit.

2. The Economic Cycle

Like any other investment, the economic cycle impacts the value of your commercial real estate portfolio. When you’re looking to sell your CRE portfolio, periods of economic expansion are an excellent time to sell and get a good return on your investment.

3. The Properties’ Performance

When your CRE portfolio is underperforming, and there’s a better investment opportunity elsewhere, it might be a good time to sell. If your portfolio has appreciated to a level you are comfortable with, but the performance indicators of your portfolio show that it is set to slow down going forward, consider selling.

The Best Times to Sell Your CRE Portfolio

There is no secret formula that tells an investor how to sell commercial real estate when they are considering doing so. Based on some of the major selling factors, the following are some of the best times to sell your CRE portfolio:

1. Market Timing Considerations

Market timing considerations can determine the best time to sell your commercial real estate portfolio. Here are some of the market timing considerations:

  • Interest Rates

When planning the timing of the sale of your commercial real estate portfolio, look out for a market scenario where interest rates are lowering. Falling interest rates stimulate demand which raises property values, thus signaling better returns for you as the seller.

  • The Cycle of The Economy

Sell your commercial real estate portfolio when the economy is on an upswing. This is so because demand is usually high when the economy is expanding.

  • Market Demand and Supply

When there is a high demand for commercial real estate and a limited supply, property values rise, thus making it a more favorable time to sell.

2. Property-Specific Considerations

Some of the best times to sell your commercial real estate portfolio can be determined by property-specific considerations. Here are some of the property-specific considerations:

  • Lease Terms and Tenant Stability

The ideal time to sell your CRE portfolio is when your portfolio has long-term leases and a stable tenant base. Properties with long-term leases and a stable tenant base sell more quickly and for more money.

  • Condition Of the Property

Sell commercial real estate holdings when the properties in your CRE portfolio are in good condition and require no significant repairs. Commercial real estate properties in good condition attract more buyers and higher commercial real estate returns.

  • Local Market Conditions

When the specific real estate market where your CRE portfolio is located is experiencing favorable market circumstances, that is the perfect moment to sell commercial real estate. Selling in positive market conditions allows you to take advantage of the market.

3. Portfolio-Specific Considerations

Some of the best times to sell your commercial real estate portfolio can be determined by portfolio-specific considerations. Here are some of them:

  • Performance Of Your Portfolio

If you’re looking to sell your portfolio and it is posting stable performance metrics, it may be a brilliant idea to sell your portfolio now and lock in a high sale price.

  • The Composition of Your Portfolio

The best time to sell your CRE portfolio is when you have a diversified CRE portfolio. It is easier to time the sale of your portfolio when it is diversified. What’s more, your portfolio is less susceptible to market volatility.

Sell Your Commercial Real Estate with Unique Properties, Inc.

If you need professional help determining the best time to sell your CRE Portfolio, contact Unique Properties, Inc. today. With over 40 years in the commercial real estate space, you can rely on Unique Properties, Inc. to make purchasing, selling, and leasing commercial properties as seamless as possible. To discover more about our commercial real estate services, contact our commercial property specialists today.

 

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