All Forum Posts by: Riki Tang

***June 2020 NEW UPDATE***: As a follow-up from my deal in contract below, I am thankful we are still in contract due to Covid-19. But now, the Buyers want to renegotiate a lower purchase price significantly reducing the offer price by more than 20% of the contract price, resulting $1 million+ less from the agreed contract price! There claim is from reason of uncertainty of if and when the economy will ever recover and longer projected time frame in leasing and secure a tenant. Also, they feel the current valuation of the commercial property is no longer fair market value compared from the beginning of 2020, pre-covid-19.

The Seller's are obviously not happy to hear of the news, and most definitely will not agree and accept a 20%+ devaluation of their commercial property. To some degree they understand the financial impact and crisis due covid-19 and the aftermath which will take many months to not only restore general public confidence before a vaccine is readily available, but mostly when the economy will ready for an upswing cycle. Buyer's maybe in a position to leverage and renegotiate a fair price they feel is justified, but Seller's on the other hand are not ready to lose their shirt, give in and settle for a deal they don't feel fair and justified.

Any thoughts or feedback will be appreciated, without a doubt, real estate market has and will continue to be impacted, but do you feel the commercial real estate market has taken a nose dive or a starting a downswing cycle, will this be damage be temporary or permanent? How much is a fair valuation for the commercial property at stake?

this is a commercial/retail/Medical use property, half of the building (3,500sf) is owner occupy as a medical clinic and owners will plan to retire. The other half (demised into smaller retail tenants) are current vacant without any tenant, pre-covid 19 they were month to month tenancy.  

I was hoping there maybe a local CRE broker that would be able to chime in with some experience and or feedback. I also work as restaurant business broker, and with many rounds of negotiations with landlord/property owners, they too were not willing to budge on lower or giving any type of concession to the existing tenants but to offer deferral of rent. There are exceptions where landlords were willing to listen and offer rent forgiveness and or lower rent by about 15-20% for a few months, but most will not likely renegotiate a new lease or amend lease with lower.

***June 2020 NEW UPDATE***: As a follow-up from my deal in contract below, I am thankful we are still in contract due to Covid-19. But now, the Buyers want to renegotiate a lower purchase price significantly reducing the offer price by more than 20% of the contract price, resulting $1 million+ less from the agreed contract price! There claim is from reason of uncertainty of if and when the economy will ever recover and longer projected time frame in leasing and secure a tenant. Also, they feel the current valuation of the commercial property is no longer fair market value compared from the beginning of 2020, pre-covid-19.

The Seller's are obviously not happy to hear of the news, and most definitely will not agree and accept a 20%+ devaluation of their commercial property. To some degree they understand the financial impact and crisis due covid-19 and the aftermath which will take many months to not only restore general public confidence before a vaccine is readily available, but mostly when the economy will ready for an upswing cycle. Buyer's maybe in a position to leverage and renegotiate a fair price they feel is justified, but Seller's on the other hand are not ready to lose their shirt, give in and settle for a deal they don't feel fair and justified. 

Any thoughts or feedback will be appreciated, without a doubt, real estate market has and will continue to be impacted, but do you feel the commercial real estate market has taken a nose dive or a starting a downswing cycle, will this be damage be temporary or permanent? How much is a fair valuation for the commercial property at stake? 

***March 2020***
Here is the summary; I am a commercial real estate agent in San Francisco where we are currently in contract ( CAR standard commercial property for sale purchase contract) and I represent both the buyer and seller for a commercial property in San Francisco. Due diligence period (60) days will soon expire in 2 weeks, but due to the uncertainties of virus containment and shelter in place mandates, buyer is now asking for additional (90) days extension in hopes this virus outbreak will subside and then ready to move forward with deal. Sellers now are in a tough position where they would ; 

1) obviously move forward with deal and close of escrow as planned sooner.

2) wiling to work with buyers but don't want them to back-out at the end of due diligence period without any compensation for loss of opportunity.

3) Seller are contemplating to ask for a non-refundable deposit from buyers if they choose to cancel the deal and walk away at the end of the (90) days extension.

4) what is fair and reasonable under these circumstances as I don't want to risk the buyer canceling the deal completely, but also don't want the seller end up with absolutely nothing? 

thank you for any feedback. 

Ricardo 

Thanks Arlen for your comments and perspective. I can't agree with you more, I am always transparent and neutral in my dealings. I basically talked and approach the seller during these challenging times, turn of events due from COVID-19. The sellers more than anything understand and sympathize with the circumstances more than wanting to force a sale, but really I advised them Not to jeopardize the sale, go along with the extension. Verbally, I spoke to the buyer and to re-evaluate the situation with the virus outbreak and to be able to remove the contingency sooner than what was agreed to. 

Here is the summary; I am a commercial real estate agent in San Francisco where we are currently in contract ( CAR standard commercial property for sale purchase contract) and I represent both the buyer and seller for a commercial property in San Francisco. Due diligence period (60) days will soon expire in 2 weeks, but due to the uncertainties of virus containment and shelter in place mandates, buyer is now asking for additional (90) days extension in hopes this virus outbreak will subside and then ready to move forward with deal. Sellers now are in a tough position where they would ; 

1) obviously move forward with deal and close of escrow as planned sooner.

2) wiling to work with buyers but don't want them to back-out at the end of due diligence period without any compensation for loss of opportunity.

3) Seller are contemplating to ask for a non-refundable deposit from buyers if they choose to cancel the deal and walk away at the end of the (90) days extension.

4) what is fair and reasonable under these circumstances as I don't want to risk the buyer canceling the deal completely, but also don't want the seller end up with absolutely nothing? 

thank you for any feedback. 

Ricardo