How to Sell Your Industrial Property in the East Bay

Selling an industrial property in Contra Costa or Solano County requires a strategic approach that's different from residential real estate. Whether you're liquidating an investment, relocating operations, or cashing in on appreciation, this guide walks you through the entire process—from initial valuation to closing.

Understanding Your Property's Value

Industrial property valuation differs significantly from residential appraisals. Buyers and their lenders evaluate your property based on income potential, building functionality, and market comparables—often in that order.

Key Value Drivers for East Bay Industrial Properties

Clear Height: Modern distribution requires 24-32 foot clear heights. Properties with lower ceilings (under 20 feet) appeal to a smaller buyer pool but may attract manufacturing or workshop users willing to pay premium prices per square foot.

Loading Infrastructure: Grade-level doors are essential for most users. Dock-high loading adds value for distribution tenants. The ratio of doors to building size impacts functionality—one door per 10,000 SF is a common baseline.

Power Capacity: Electrical service (400+ amps, three-phase) commands premium pricing, especially from manufacturing and food processing tenants. Document your electrical specs early.

Yard and Parking: Trailer parking, outside storage areas, and adequate car parking (typically 1 space per 500-1,000 SF) increase both value and marketability.

The 6-Step Sale Process

1. Broker Opinion of Value (BOV)
   Before listing, get a detailed analysis of your property's market position. A thorough BOV examines recent comparable sales, current listings, lease rates, and your property's specific strengths and weaknesses.
2. Pre-Marketing Preparation
   Address deferred maintenance, gather documentation (surveys, environmental reports, leases, utility bills), and consider professional photography including drone aerials.
3. Strategic Marketing Launch
   Your broker should deploy a multi-channel approach: commercial listing platforms (LoopNet, CoStar, Crexi), targeted buyer outreach, email campaigns to qualified investors, and signage.
4. Tour Management & Offer Negotiation
   Qualify potential buyers, coordinate access for tours, and evaluate offers based on price, terms, contingencies, and buyer capability—not just the highest number.
5. Due Diligence Period
   Buyers typically have 30-45 days to inspect the property, review documents, and secure financing. Be prepared to provide title reports, environmental assessments, and building records.
6. Closing & Transfer
   Work with your escrow company and broker to ensure clean title transfer, proration of rents and expenses, and proper documentation.

Pricing Strategies That Work

Industrial properties can be marketed with several pricing approaches, each suited to different situations:

Listed Price: Traditional approach with a stated asking price. Works well in stable markets and for properties with clear comparable sales. Signals confidence and helps qualified buyers move quickly.

Call for Offers: Used when demand is high or when you want to create competition. Set a deadline for offers and let the market determine value. Most effective for well-located, well-maintained assets.

Negotiable/Make Offer: Appropriate when comparables are limited or when you want to test the market. Requires strong qualification of buyers to avoid wasted time with unrealistic offers.

Owner-User vs. Investor Buyers

Your marketing approach should differ based on likely buyer types:

Owner-User Buyers are businesses purchasing the property for their own operations. They focus on functionality, location relative to employees/customers, and often pay premium prices because they're not constrained by cap rate requirements. Many use SBA 504 loans, which require owner-occupancy.

Investment Buyers evaluate based on current income, lease terms, tenant credit, and potential for rent growth. They apply cap rates to NOI, making current rent rolls and lease expiration schedules critical to value. Multi-tenant properties often attract these buyers.

Tax Considerations

Commercial property sales trigger capital gains taxes, depreciation recapture, and potentially state taxes. Two strategies can defer these obligations:

1031 Exchange: Reinvest proceeds into "like-kind" property within strict timelines (45 days to identify, 180 days to close) to defer capital gains. Requires advance planning and a qualified intermediary.

Installment Sale: Spread gain recognition over multiple years through seller financing. Less common but useful when buyers need flexible terms and you want to spread tax liability.

Consult your CPA or tax advisor before listing—the right structure can save significant tax dollars.

Common Seller Mistakes to Avoid

Overpricing Based on Replacement Cost: What it would cost to build doesn't determine market value. Buyers pay based on income potential and comparable sales.

Deferring Maintenance: Visible deferred maintenance signals hidden problems to buyers. Address obvious issues before marketing or adjust pricing accordingly.

Inadequate Documentation: Missing surveys, unclear easements, or undocumented improvements delay closings and can kill deals. Compile your file early.

Ignoring Environmental History: Industrial properties require Phase I environmental assessments. Know your site's history and any potential concerns before buyers discover them during due diligence.