Define that Term: Dispositions / Divestments
Welcome to a fresh new take on CPD’s blog! Here we will share valuable information about the real estate industry – everything from the latest trends and reports to case studies, interviews, helpful tips for property owners and more.
Since the real estate world has its own unique terminology, we thought it would be helpful to share a series of posts that define unfamiliar industry words and phrases. First up on our list is a term that is not only a part of our CPD name, but part of our everyday world…that is, dispositions, also known as divestments.
One of Merriam–Webster’s definitions of disposition is “the act or the power of disposing or the state of being disposed,” such as in the transferring to the care or possession of another. The definition of divest is “to deprive or dispossess especially of property, authority, or title; ex. divesting assets to raise capital.” Both of these definitions can be confusing in relation to commercial real estate, but the overall concept is that when you dispose of a property, you transfer the ownership or care of it to another person or entity. It involves the act of selling or leasing a property, but it’s not always that simple.
Inevitably, one question comes to mind: What is the difference between a property that is considered a disposition and another property that is being sold? Frankly, there is not much difference in the property itself. Rather, the difference lies in how the owner views the property. Typically, dispositions/divestments are properties that owners or tenants want to sell off or lease from their property portfolio because they no longer meet a specific need. Dispositions are a subsection of asset management that is a more specialized practice area, focusing on these distinct properties.
CPD has extensive experience in this arena. We can manage the sale or leasing of all or a portion of a company’s real property portfolio that is deemed as surplus. Do any of your properties fall into this category? If yes, CPD can evaluate your property and strategize next steps with you.
Are you curious about other commercial real estate terms? Please feel free to share these terms below, and you may just see an explanation of them on an upcoming blog post.