How Long Does it Take to Own Commercial Real Estate?


There are two major impediments to closing the deal on commercial property. These are the due diligence on the property, including the appraisal, and the property acquisition process. Bank approval of the loan can add to the time taken as well, but that will vary greatly between customers.

Due diligence is an essential step with any commercial real estate transaction. It may be necessary to perform an analysis of both the market and a thorough appraisal of the investment, and these things can take time. Although any financier of a commercial real estate loan will naturally demand that the loan meet basic standards of due diligence, a transaction that is fulfilled entirely in cash should ideally take the exactly same care.

Financing time can be highly variable from customer to customer. Some groups or individuals will have the sort of cash on hand needed to buy a commercial property outright. Others will have to work through financing institutions such as banks, and everything depends upon the bank’s estimation of their loan request. Remember that banks will generally want more appraisal and underwriting with commercial property than with residential property.

One typical example of an ordinary process of commercial property transfer could involve about 30 days of due diligence, followed by a month or two for the financing contingencies to be worked out. The closing will often occur two weeks after all the relevant contingencies expire. This gives a duration of between 75 and 90 days for an ordinary commercial property sale.

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