Marketing Platforms For Apartment Buildings
In this post, I’ll cover one of the most significant advantages a commercial real estate agent has over an owner selling property on their own: marketing reach. Even if your property is fantastic, it will be difficult to get the best possible price if buyers don’t know it’s for sale. I’ll focus on commercial apartment building sales on Chicago’s two major listing platforms, the Multiple Listing Service (MLS) and LoopNet/Costar.
Good commercial brokers have a detailed buyer list and make sure they notify investors when they have a property for sale. However, knowing every potential buyer in a given market is impossible. This is especially true for Chicago area apartment buildings because of the complexity of the market and the huge numbers of interested investors. Let’s dive in.
Multiple Listing Service (MLS)
The MLS is what most owners think about when a broker says their property is on the market. The MLS is a web-based platform where agents can market active listings. Most single-family homes and residential properties sell on the MLS. Most agents in Chicago have access to the MLS. Only agents can search for property on the MLS. If an investor wants access to the MLS information, it will have to come from a licensed realtor.
- Powerful tool for marketing properties to Chicago realtors
- Almost all active Chicago real estate agents have access to it
- Regulated by both the Chicago Association of Realtors and the State of Illinois
- Investors don’t have direct access
- Once it is on the MLS – – pricing and time on the market are tracked and posted. (If it sits on the market too long or there are multiple price adjustments, buyers use that information as leverage on a deal)
- Brokers can list commercial properties on the MLS, but it is a far more powerful residential platform.
LoopNet is the leading national sales platform for commercial properties. Costar is the research arm of LoopNet. Anyone can list a property on LoopNet. However, if you do not pay for the listing, only people with a Costar membership can see it. Costar membership is expensive. Very few brokers have Costar access, and even fewer investors have it. To get all the benefits of listing on LoopNet, the person listing the property has to pay for it and know how to use it effectively.
- National Reach
- Specifically for investors and commercial agents
- Offers a range of marketing tools and features specifically designed for commercial real estate listings
- No days on market or price change data for buyers to leverage in negotiations
- High cost limits the amount of brokers using the platform
- Commercial platform better suited for 5+ unit buildings and properties over 1 million
- A less regulated environment
LoopNet Vs. MLS Data
We checked the 2022 sales in Chicago to find out what was going on with each platform.
% of total listings column is the percentage of total listings that occurred on the platform in the given category. (For example, in the 1-5 million dollar category on LoopNet, 65.56% of their listings were 1-5 million dollars)
The sales volume column is the dollar amount of sales that have occurred in a given category. (For example, in the list price category less than 1 million, the sales volume for properties sold on Loopnet in 2022 was $61,322,500.)
2022 Chicago MLS Commercial Listings for 5+ Unit Commercial Apartment Buildings
Chicago LoopNet Commercial Listings for 5+ Unit Commercial Apartment Buildings in 2022
MLS Vs. LoopNet Data Takeaways
- LoopNet access is important for brokers listing 5+ unit apartment buildings with a list price of over a million dollars.
- MLS access is important for brokers listing apartment buildings with a list price under a million dollars.
- Why do we see so few transactions for over five million dollars? Remember those good commercial brokers that build and maintain contacts with qualified buyers that were mentioned earlier? Plain and simple, there are fewer transactions, and there are fewer potential buyers who have the ability to buy that type of asset. This means the likelihood of a broker having direct contact with that kind of buyer is much higher. So, many of these deals never appear in any listing service.
What about 2-4 unit buildings?
2-4 Unit buildings with no retail or office space are considered a residential asset. However, they are also a form of investment property. So you have two different pools of buyers with very different motivations. There are pure investors and people looking to live in one of the units and rent out the other units.
There are a lot of 2-4 unit buildings on the MLS. This makes sense because there are far more 2-4 unit buildings under a million dollars available. There are also far more people looking at 2-4 unit buildings as a potential place to live. That means if the building is not a strong financial performer, other attributes can make it command a high price.
A good commercial broker has a marketing strategy that incorporates using the correct tools that will lead to the property being sold at the highest possible price. There’s nothing wrong with listing properties on multiple platforms, but if a broker doesn’t have access to a certain platform, that can’t happen. Ask brokers when you are interviewing them what their marketing strategy is and why.
If you are considering selling your apartment building, please reach out to us – https://chicagoapartmentbroker.com/contact/
Join our newsletter – bit.ly/rrealtynewsletter