Don’t Just Improve the Asset. Prepare It for the Next Buyer
By Doug Parker, Montbart
First published 25th August 2026
It’s a very common thing for owners of commercial property to want to improve the asset. This might be by increasing occupancy, doing clever things with leases (regear etc), undertaking works and refurbishment, improving the presentation or just solving some of the messy ongoing issues that always seem to accumulate over time.
To be clear, I’m always in favour of these things and I believe all of them can achieve the aim of ‘improvement’.
However one thing many owners don’t go as far as, is putting themselves in the shoes of the next buyer. This is a substantial mindset change, because optimising an asset in isolation is not the same as preparing it for the market. Please bear with me here, I know what you’re thinking – “I’m not looking to sell” but I promise you, the exercise is worth it.
A prospective (and hypothetical) buyer is not just asking whether the building is better than it was two years ago. They’re asking whether the income is clear, if the risks are fully understood, whether the opportunity is feasible, and whether the price is appropriate and reflects the work still required. In short, a prospective buyer is forming an investment case. If the seller understands that case early enough, asset management can become much more focussed.
Start by understanding where the asset actually sits.
Before looking at what needs to be done, it helps to understand what sort of asset you’re dealing with. Its sounds obvious, but owners can sometimes become so familiar with a building that it becomes difficult to see it in the same way as an external investor.
My usual way of demonstrating this is by reference to an asset categorisation framework, loosely inspired by the logic of the BCG matrix. In Montbart terms, the question is whether the asset is one to protect, improve, reposition or rationalise. It’s important the distinction between types is made because not every asset deserves the same capital, time or attention.
· Some are already doing exactly what is required of them. They produce strong and stable income, demand limited management time and might just need to be protected.
· Others have very clear potential but need more active management, possibly through leasing, regears, capex investment or operational improvement.
· Some might be considered transitional. They might need a better-defined repositioning plan before they become attractive to the market.
· And some might simply no longer justify the capital or management attention they use. In those cases, rationalisation or disposal could be the better decision.
And to be clear, there’s no hierarchy involved here. An asset-management opportunity is not automatically a bad property, and in fact, for the right buyer, the imperfections may be exactly where the attraction lies.
Vacancies, short leases, under-rented space, poor management, inefficient layouts or deferred capital expenditure can all represent risk to some prospective owners (and Valuers too). However they can also represent the mechanism through which value is created. It’s important to be realistic about which category the asset occupies now, and whether more intervention can credibly move it into a more attractive position. Trying to convince a buyer that a transitional asset is a finished investment doesn’t fool anyone. Likewise an owner can spend a lot of money trying to improve a property without materially changing the way the market sees it.
So the next questions are: Where does the asset sit today? Where do I want/need it to sit? And is the gap between the two commercially worthwhile? And sometimes the most appropriate plan is not to improve the asset at all.It might be to simply understand that capital and management attention would offer a better return elsewhere.
Who is the natural buyer of this asset?
Who are you theoretically preparing this asset for? Different buyers are generally looking for very different things.
A value-add investor will often look for imperfect assets. They might want vacancies they can fairly easily fill, rents they can adjust, leases they can restructure or capital expenditure that offers a measurable improvement in income and value. So, their return is quite dependent on having something to do (or ‘fix’).
A more income-focused investor could have almost the opposite approach. They might look for strong covenants, long lease terms, limited capital expenditure, good-quality accommodation and very few surprises. They are prepared to accept less upside (improvement potential) in exchange for greater certainty of income. Of course neither approach is ‘right’ or ‘wrong’ and in fact some potential buyers might be looking for a combination of the above, but the asset should be presented honestly to the buyer most likely to value what it offers.
So it’s important to make a distinction between selling the opportunity, or selling the completed investment.
If the opportunity is the product, there needs to be enough evidence for the buyer to understand how value can be created. And conversely if the completed investment is the product, the seller needs to remove as much uncertainty as reasonably possible.
Different buyers require different proof.
It’s interesting to note that a buyer often (mostly) does not simply accept the seller’s description of the property. They need evidence, and that evidence needs to be quite clear.
Is there genuine rental growth available?
Can any vacancy realistically be filled?
Are there lease events that can be used strategically?
Does the building need capital spend on it, and what return could that lead to?
Is the location good enough to support the plan?
How does the refinance or exit look when work is complete?
A lower-risk, long-term investor is likely to ask a different set of questions:
How secure is the income?
When are the next lease breaks and expiries?
How financially secure are the occupiers?
What capital spend is likely during the hold period?
Is there anything unexpected in the leases that could trip up the owner during the term?
Will the building remain attractive to occupiers in five or ten years?
So it’s perfectly feasible the same asset can look attractive to one buyer and quite unappealing to another. The seller’s job is not to attempt to make the asset appealing to all potential buyers (that wouldn’t be possible), but they need to understand which buyer is most likely to see value in it, and to make the investment case as clear as possible.
An asset has to prove its investment case
I have seen this particularly clearly with office assets outside the well-established markets institutional investors know intimately. A building can be well presented, well located and more than capable of attracting good occupiers, but if a buyer is not familiar with that local market, they are likely to be very cautious. Proof will be needed, including evidence of recent lettings and a good understanding of what sort of occupiers are active locally.
The building doesn’t have to be ‘currently’ fully occupied with blue-chip grade tenants. However it is important the prospective buyer can see clearly that good quality tenants are likely to commit to sensible lease lengths, that vacancies are not an ongoing inherent problem, the property/building is not too management-heavy, and that capex spend can be kept to a minimum.
An asset cannot simply be described as ‘investment grade’ simply because it has potential (it’s up to the buyer to make their mind up on that). It has to demonstrate to the market it can support investment-grade behaviour, because potential buyers have to be convinced, and fairly quickly too.
Good management is often the best preparation for a sale
“The best sale preparation often starts years before the sale.”
It’s often tempting to believe sale preparation is all about the weeks leading up to marketing and eventual transfer. In reality though, much of the actual preparation is carried out in the months and years prior to even thinking about disposal. It’s also very often little more than the basics of good management too.
This can sometimes be referred to as ‘lease hygiene’ and consists of items such as clear, up to date and comprehensive lease information, service charge schedules/apportionment/accounts and reconciliations, details of capital expenditure and records of communications with tenants over any plans for renewal, regear or surrender etc.
This is certainly not glamorous stuff but it’s the details that make a lot of difference when managing the asset. When it does come to disposal, having everything available in a clear and well put together format significantly reduces any prospective buyer’s nervousness.
Not every improvement creates value
It pays to be disciplined, because there is often less value to be created in aesthetic upgrades and improvements compared to the extension of a critical lease (for example). It’s easy for commercial property owners to begin to think like home sellers and concentrate on ‘kerb appeal’. It can certainly help, but it’s likely the buyer will have a more commercially led view.
Completing expensive capital works shortly before sale for example, may not generate a full payback of value if the buyer would have preferred to carry out the work themselves. So, good preparation is not about making the building perfect. It’s about focussing on the relatively small number of actions that make the investment case more credible.
Think -
improving occupancy;
extending important leases;
clarifying or resolving lease disagreements;
providing a realistic capex plan;
gathering credible leasing evidence;
improving the quality of management information;
…or just ensuring the buyer can understand the asset without having to piece together the strands of a story.
Sometimes the correct strategy is to rationalise
This is sometimes the possibility that owners resist, but not every asset can or should be improved indefinitely. Sometimes the conclusion is that the property no longer fits the objective of the wider portfolio.
It might be it requires disproportionate management attention or capex spend. Or the risk profile may no longer suit the owner. Or even that the owner might simply be better placed putting capital into a different asset where they have a stronger competitive advantage.
This is where asset rationalisation can become part of the strategy. The decision to sell should not be viewed as failure, and it can be a very deliberate decision of appropriate capital-allocation. A framework can help an owner categorise assets that should be protected, improved, repositioned or disposed of. Of course, this is particularly vital at portfolio level as funds and management time are (regrettably) never infinite.
Prepare the asset for the market you actually have
Of course, there’s no single definition of the perfect commercial property investment, because different investors want various combinations of income, risk, growth and management opportunity. Therefore the owner’s task is to understand where their asset sits within the spectrum and prepare it accordingly.
An asset-management buyer wants to see a clear and viable path to value creation. On the other hand, a core investor wants confidence that the income is stable and management input is low.
Both approaches need evidence, as a lack of it is likely to result in a discount. So for an asset-management sale, rather than thinking about how to better present the property, think about what the next buyer needs to believe about the property? And what evidence would make that belief seem reasonable?This brings us back to the fundamentals of:
· Known risks,
· Reasonable and feasible levels of capital spend,
· Clear lease and management information,
· An income stream that is ‘understandable’
All of the above must be capable of standing up to scrutiny, and just because an asset is marketed as ‘investment grade’, doesn’t necessarily mean it is. It becomes investable when the next buyer can fully understand the income, believe the story and see an acceptable relationship between risk and return.
And very often, the best way to achieve that is simply good property and asset management, carried out long before the sale board goes up.
By Doug Parker, Montbart
First published 25th August 2026
