The 8 D’s That Drive Commercial Real Estate Transactions

Commercial real estate deals don’t just “happen.” In fact, most CRE transactions are triggered by predictable life, business, or financial events. Industry groups like NAR Commercial and CCIM Institute regularly point to these motivations as leading drivers behind property movement in local markets like mine in Lafayette, IN and Tippecanoe County.

Here are the 8 D’s that most commonly create opportunities for buyers, sellers, and investors.

1. Death- I know, right off the bat. 
Estate transitions and probate-related changes often push properties onto the market. Inherited commercial assets are frequently sold because heirs don’t want to or are not able to manage the property. Others may live out of state or would be inheriting the property in partnership with others etc. These scenarios often create motivated sellers and clear timeline-driven deals. 

2. Divorce / Dissolution
When a marital or business partnership ends, property assets typically need to be liquidated or reallocated. SBA small-business dissolution data note that real estate is one of the first assets reviewed during splits — making these properties common candidates for quick sales. 

3. Downsizing- We have been seeing a lot of this in the office sector
Businesses reduce space to cut overhead or adjust to new operating models. Companies will continue rightsizing as hybrid work models grow, leading many small businesses to downsize into more efficient spaces. This means more sub-dividing for larger units where possible and the larger spaces will (already are) feel the pain the most here. 

4. Disability
When an owner or key decision-maker can’t manage operations, or need to move the equity to a more manageable asset, properties often hit the market. This trend is frequently mentioned in CCIM’s ownership transition studies, especially among aging sole proprietors who manage their own buildings. I see a lot of this with residential investment portfolio holders who self manage. 

5. Departure
Retirement, relocation, or moving operations out of market creates natural selling opportunities. Relocation is one of the top reasons owners divest their property and re-deploy capital elsewhere. I expect this to be a larger trend over the coming decade as we see baby boomer owners start to move onto more passive assets. 

6. Danger / Distress- Here is where a lot of investors are looking for "gold" 
Deferred maintenance, code issues, environmental concerns, or aging building systems make owners consider selling instead of reinvesting. Older buildings with heavy CapEx needs frequently shift into “sell mode” instead of repair. Combining this D with another on this list is a common combination. 

7. Disaster
Fire, flooding, structural failures, or environmental events can force a sale. Per FEMA’s commercial property impact data, many owners choose to sell after major incidents rather than rebuild — especially when insurance doesn’t fully cover upgrades to current code.- I learned a lot about this during the research. Partnering with a contractor who specializes in this area may uncover more routes to opportunity here. Learning to solve a typical but larger problem can (failing basements or foundations for example) can allow you to understand the issues better than other investors and thus narrow competition when looking at opportunities. (fire restoration is another great example here)

8. Default
Financial distress, loan maturity problems, or cash-flow pressure push owners toward selling. Increasing interest rates and tighter cash flow have made defaults and maturity-related sales more common nationwide over the last few years. Since commercial properties need to be restructured more often (typically every 3,5,7 or 10 years) compared to a 30 year most are used to for primary homes. 

What can you do with this information? 
Have a better lens as you move through your day. Understanding the “8 D’s” — Death, Divorce, Downsizing, Disability, Departure, Danger, Disaster, and Default — can help owners and investors spot opportunities and make smarter decisions. 

Have Questions About Commercial Real Estate?
Contact me anytime for a confidential discussion. 

-Shane