Advice sought on making offer on industrial units

[ModernAndy]

Update time.

I've spent a lot of time researching the company that owns the buildings. I managed to get the administration paperwork and this is replete with information. The administrator's aim is to realise the value of the properties. The property owners owe millions to one particular bank that is now part of a well known finance company named after a Close pair of Brothers. This is the only creditor who will end up getting paid out of the administration (and that's in writing). Interestingly, at the present moment the administrators have less than 2 weeks left before they need to extend the period of administration (again) and they only extended it by 3 months last time where the period of administration beforehand was nearly 2 years. I'm not sure if I'm looking too far into this fact but I wonder if there's pressure from the preferential creditor.

There's around £200k in the company account right now (they seem to only be losing a few thousand a month currently- it was around £260k a year before) so I can't see the administrators being desperate for money at the present moment. Again, perhaps pressure from the bank?

A rather nice 5,500 sq ft unit just down the road from us was sold last year for £125k so that's only £22+VAT sq ft. It was also sold to the company operating out of the premises immediately next door to that unit so in my opinion at least, that was a transaction done very much in the seller's favour. I'm not sure if inverse quantum (i.e. the price per sq ft being less for larger properties) would have much of a bearing on that price but I would hope to use this price to negotiate on the units that have been empty for a number of years.

I'm going to register my interest in the property with the property agent very soon.

Anything I should look out for that's a sign that the administrator will do a fire-sale on the properties?

[MrC986]

If you're tempted to make a cheeky offer, put it in an email to the selling agents & build sons background if you can I.e. If you have the relevant cash to buy here and now, then say so. Make it subject to contract and survey and also ask for confirmation as to whether the property has an estate service charge for the common areas/roads & if so how much etc? If there's no mention of service charge, ask who owns the road leading to the unit. In making a formal offer, which you could also make directly to the administrators etc, you've put a clear offer down.

There will be holding costs for the vacant unit I.e. Business rates, insurance, weekly security checks etc and in some cases if the unit is left vacant for a lengthy period of time, the interior of the unit can deteriorate due to damp (this is normally where there are offices included & ceiling finishes suffer) or at worst blocked gutters etc leading to water damage.

[skwdenyer]

Chrisgr31 said:

insurance_jon said:

2. Rates are payable (as it's likely the current owner will have used the allowance) on vacant units. However it's usually not payable if there are significant works to refurb the units going on

The 2nd sentence is out of date. Its a total nightmare at the moment to get a property removed from the Rating List if it needs or is undergoing works. I am dealing with a proeprty that burnt down in February and was demolished it is still in the List and having rates paid on it.

Sorry to drag up an old thread, but since this is actually relevant... do you think the recent Supreme Court judgement as regards empty rates during refurbishment will have actual impact in the real world?

[surveyor]

skwdenyer said:

Chrisgr31 said:

insurance_jon said:

2. Rates are payable (as it's likely the current owner will have used the allowance) on vacant units. However it's usually not payable if there are significant works to refurb the units going on

The 2nd sentence is out of date. Its a total nightmare at the moment to get a property removed from the Rating List if it needs or is undergoing works. I am dealing with a proeprty that burnt down in February and was demolished it is still in the List and having rates paid on it.

Sorry to drag up an old thread, but since this is actually relevant... do you think the recent Supreme Court judgement as regards empty rates during refurbishment will have actual impact in the real world?

The very first thing to understand is the real world has no place in the world of rating. There is a famous quote, but I can't quote get it out of my head. Chris might remember it.

[DSLiverpool]

Just to point out on valuations that my unit was always valued at say £10 on a long sale and £8 on a fast sale by the largest commercial property surveyors on the Wirral, it took two years for it to sell at £15 and it did so because it was on the end of a row with the side wall facing the A41 offering huge advertising potential something the valuer didnt feel was worthy of a premium.

So all things are variable

[ModernAndy]

Since this thread has been resurrected I'll mention that I discovered that companies in administration don't pay rates on empty properties.

[skwdenyer]

surveyor said:

The very first thing to understand is the real world has no place in the world of rating. There is a famous quote, but I can't quote get it out of my head. Chris might remember it.

LOL

Since the Supreme Court case was specifically about a property undergoing refurbishment, which found in the ratepayer's favour, I guess my question was whether the case was so narrow as to make it a point not generally appicable in "the real world."