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Commercial Real Estate

Working commercial real estate? All you need is just a little patience

These days, commercial deals are harder than ever to put together. Even if you find a buyer (step 1) who wants the property, your next hurdle is negotiating a price acceptable to the seller (step 2) who may or may not understand that his property is not worth what he THINKS it is worth.

“Of course prices have dropped across the country, but my property is still holding its value, right? What do you mean it’s not worth what I put into it? I can’t sell it for what you’re saying the comps come in at! It’s worth a hell of a lot more than that!”

After the buyer and seller come to a meeting of the minds, then we have the financing hurdle (step 3) and inspections / due diligence (step 4).

It’s a long haul, not a sprint, and many agents don’t understand just how much time and effort all this can take. Residential agents especially see the big bucks exchanged in commercial deals, and think they can dabble a bit in commercial listings, not knowing just how much work they are in for, before the big payback (maybe) comes.

The 11 year payoff

I got an email from one of my commercial clients the other day, praising the patience of one of the participants in a large deal his company just put together.

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In this (very large) commercial transaction, the owner of the property worked 11 years before the developer could even start building. Yes, it took 11 years to get phase one of the project off the drawing board and into shovel phase. In that time, the last 7 years were tied up in permitting alone.  The last year was devoted to engineering and final permitting, and the deal closed just a few weeks ago.

Talk about the patience of a saint! If you were the agent in that transaction, would you have had the tenacity to keep going? Would you have given up in year 2 or 3 or 10? How many agents who might have started on this would even be in business 11 years later? Do you think you have what it takes to sell commercial real estate?

The next time you have a rough one, or a deal that seems to go on forever, remember this one!


Flickr photo courtesy It’sGreg.

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Written By

Erica Ramus is the Broker/Owner of Ramus Realty Group in Pottsville, PA. She also teaches real estate licensing courses at Penn State Schuylkill and is extremely active in her community, especially the Rotary Club of Pottsville and the Schuylkill Chamber of Commerce. Her background is writing, marketing and publishing, and she is the founder of Schuylkill Living Magazine, the area's regional publication. She lives near Pottsville with her husband and two teenage sons, and an occasional exchange student passing thru who needs a place to stay.



  1. BawldGuy

    July 7, 2010 at 11:43 am

    Erica — Thanks so much for reminding me why I abandoned pretty much all comm’l real estate except for residential income. 🙂 You hit the nail on the head — again.

    As far as sellers who think their property is worth more than the market says, I’ve always asked them ‘innocent’ question while lookin’ ’em straight in the eye.

    “Geez, you feel pretty strongly about that. Would you pay that much for your property today?” Crickets. 🙂

  2. Benn Rosales

    July 7, 2010 at 11:50 am

    11 years? Holy kaw! Everyone involved on the deal would hate me in year 2. Seriously.

  3. BawldGuy

    July 7, 2010 at 11:52 am

    Now THAT’s funny. 🙂

  4. BawldGuy

    July 7, 2010 at 12:05 pm

    That’s why The Boss and Lani were our best moves ever. 🙂

  5. Erica Ramus

    July 7, 2010 at 12:55 pm

    Glad you guys enjoyed the story! This deal lasted longer than many marriages!

  6. Duke Long

    July 7, 2010 at 2:16 pm

    One of the biggest transactions that I have ever been involved with took a mere 13 months. On again Off again. Lawyers, accountants, engineers, zoning, water storage,permits and so on. Dealing with one of the biggest brokerage firms ( JLL) in the world along with one of the biggest companies in the world (Wal-M__). Was it worth it? At that time the experience was invaluable to my career. The client still owns the property, and from conversations it is still a great asset. 11 years…WOW…. I hope it turns out to be great deal for your friend!

    • Erica Ramus

      July 7, 2010 at 7:33 pm

      It is indeed very profitable in the end. And phase 1 is signed and sealed, closed, AMEN.

      Our local townships and municipalities many times are the key problem or bottleneck. They make it very difficult to jump through all the hoops, and even when you do, sometimes they change their minds! It is maddening. The permitting is a nightmare.

  7. Nadina Cole-Potter

    July 7, 2010 at 4:57 pm

    Add to falling values that there is usually another party involved in the negotiations up front (not just at payoff), the lender. That is because, in the Phoenix market, sales made between 2002 and 2008 were overpriced and over-leveraged. And, in many segments, overbuilt.

    Deal structuring, financial acumen, property/market knowledge, and negotiating skills are keys to getting deals closed.

    Side qu3estion — how do I get those stacked up links to Facebook, Submit, Buzz, and Retweet logos off my screen — a key part of my screen!!! I don’t use any of them and I don’t plan to use any of them. And there is no X-close link. Ugh!

    • Erica Ramus

      July 7, 2010 at 7:34 pm

      I don’t know how to remove those icons. I don’t think you can! They don’t bother me because I have a nice big screen, but see how they might take up space on a smaller screen.

    • Benn Rosales

      July 7, 2010 at 7:55 pm

      they’re being moved – if you have further problems, email talk at, thanks

  8. Nadina Cole-Potter

    July 7, 2010 at 10:16 pm

    Thanks, Benn, for the tech assistance.

    Erica — Congratulations to you and your client for hanging in there! It always amazes me how municipalities which say they support economic development, want an enlarged better tax base, support free enterprise, etc. do so much to interfere with it and delay it. I have noticed that public employees at all levels, except those in the dedicated economic development departments whose job it is to facilitate economic development, do not have a clue about the time value of money. Or, they see how much the investors and developers will make on the deals and, compared to their salaries, drag their feet out of envy and/or resentment. They aren’t professionally and emotionally invested in the economic betterment of their community.

    One of the ways that developers and re-developers in our area have found to succeed is to request a pre-submittal meeting with the folks in the economic development department or functions. The E.D. staff have become very good coaches and advocates for developers while at the same time informing the developers of the potholes they should plan for or work around along the way. I have noticed that the programs in urban planning at Arizona State University now have an economic development component which is a good thing.

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