Considering Selling Your Apartment Complex?
Inspections and showings for apartment buildings are challenging, particularly for owners who self-manage. It is therefore important for these owners to understand the best way to approach inspections and showings in order to impose minimal impact on their tenants while also ensuring prospective buyers have everything they need to move an impending sale forward, and achieve the highest possible sale price.
The following tips can support apartment owners dealing with this predicament:
1. If you need to get access to an apartment unit, you are required by Washington State Law to give tenants written 48 hour notice to enter their unit.
2. If the property is not yet under contract with a buyer, we recommend that owners do not tell the tenants they are thinking of selling their building.
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- Oftentimes when apartment buildings sell, new owners will either want to raise rents right off the bat, or try to remove tenants in order to renovate units and then achieve higher rents.
- If tenants catch wind of an impending sale before it is under contract with a buyer, they may try to move out or cause chaos, making the impending sale more challenging.
3. Some reasons owners have used with tenants to tour their units are:
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- Showings for prospective tenants when leases are up.
- Need updated photos for insurance companies.
- Owners wanting to make sure everything is running smoothly in units and there are no major capital expenditures needed.
- Current lender is requiring an inspection of each unit.
4. If the property is under contract and you have to give notice to inspect or show units, it is most likely an ideal time for owners to inform tenants that they are considering selling.
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- At some point, the tenants need to know that their building will have a new owner and they will be making their rent payments to a different entity.
- If the buyer is serious about going through with the purchase, it is likely the right time to let your tenants know.
5. When an owner decides to sell, attempt to keep access to a minimum. You should be prepared for the following.
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- Touring prospective buyers through vacant units, common areas and “owner friendly tenants” prior to an offer.
- Once under contract, prospective buyers wanting to inspect every unit.
- Appraiser entering a small sample of the units.
- A small sample of units and the common areas being inspected for a phase 1 environmental study.
6. When inspecting or showing units, try to be extremely respectful of tenants’ time and space.
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- This includes making as many accommodations for the tenants as you can.
- Be sure to check that all the doors and windows are locked, lights are all off, and appliances are off, etc when you are done viewing units.
As experienced multifamily brokers, we are here to help any owner through this process and will do our best to facilitate a smooth and chaos free transition. Please reach out if you have any questions regarding your property or unique situation.
SVN Cornerstone Multifamily Team
Nate Gant is an Advisor with SVN Cornerstone. Nate has been an active member of the Eastern Washington real estate community since 2010. He has brokered more than $100 Million in real estate transactions, specializing in land development, REO and investment properties. To get in touch with Nate, email nate.gant@svn.com or call 509.993.4440.
Jordan Lester is an Associate Advisor with SVN Cornerstone. Jordan served as a brokers assistant for 3 years with SVN Cornerstone before becoming a full time broker. Jordan specializes in the multifamily sector of commercial real estate. To get in touch with Jordan, email jordan.lester@svn.com or call 509.496.6922