Selling commercial property in Gisborne - advice please

[Bruce Johnstone]

Your thoughts and advice would be appreciated.
After owning it for 20 years, I have decided it is time to find new owners for the Masonic Hotel Building in Gisborne. My work is taking me overseas a lot now and this building needs an active investor, keen to build their personal wealth by growing its residential and commercial rent roll.
My latest valuation is $3.5m. The building has seven commercial tenants on the ground floor, including a busy Subway restaurant and a large hair salon. There are 13 residential apartments on the upper floors. In addition there are two further apartments that just need to be completed and a further five that could be developed in currently vacant first floor space.
My question is how should I go about selling this?
I am thinking auction. Do you agree?
What agent? Bayley’s have a franchise in Gisborne but their commercial salesperson has only just started in real estate and I am concerned that they generally lack experience selling commercial property. Colliers have offices in Hawkes Bay and Tauranga, but I suspect my buyer may be a Gisborne local. Will they be able to do a good job of marketing a building that is a three hour drive away?
What commission? What percentage should I expect to pay? Should I expect a contribution to marketing expenses?
How much marketing? Bayley’s suggest spending around $10k. Does this seem enough? Too much?

http://www.facebook.com/pages/Gisborne-New-Zealand/Gisbornes-Masonic-Hotel-Building-residential-apartments-shops-for-rent/174813348043?ref=ts

[revdev]

The photo's look great Bruce, you have kept it in superb condition. Good luck with the sale.

[Davo36]

Bruce, it does look like a nice building as revdev says.

With Bayleys, could you perhaps talk to them and make it a condition of the listing that an experience Auckland agent is included as well. They often seem to work in pairs anyway.

I think you may be right about a local buyer buying it. Perhaps a cashed up or otherwise well off dairy farmer? Could it be worth an ad in the local farming magazines?

$10k should be enough to get the attention of anyone looking for this sort of thing. Were you thinking of an auction? I don't know if that's best or not.

Other than that, you'd get a higher price with the 2 flats finished off and as much done as possible on the other 5 - like resource consent and/or building consent.

David

[john kerr]

Gisborne Commercial

Firstly do you really need to sell it? I have been in it, what a wonderful building.

I dont deal to much in commercial - but here goes another common sense approach. Auction versus Tender. Auction would give you a fixed period of advertising it locally and internationally (so i think a contribution from you would get it further afield than if you let the agency to do it). The Auction process would pit buyer against buyer and will enable you to see the potential buyer if you have to negotiate with them later on it will also let you hear what the market is saying to you during the bidding process.You can still place your reserve on there and see what the bidding comes too.
The Tender process has all these points and is faceless and my experience with Tenders for residential properties is that they have not been able to achieve there price. Agency wise, I would go with Colliers because of their international networks.

Get a good Property Manager to manage for you and dont sell ha ha.

Hope this helps.

[Bruce Johnstone]

Thanks

Thanks all - I also have the option of using a local agent with more experience with commercial property together with Colliers, so this seem much better.

[Findspace]

You can also list it on Findspace.co.nz for free.