Lately I am being asked quite often about how we are getting deals done. I usually give a quick answer with my thoughts based upon any one or two examples I can paint from active deals. I spent a good part of this last week analyzing our pipeline and the inventories of our competition and wondering how many of the current deals are “right place, right time” vs. being the result of a carefully crafted strategy to position the asset in the marketplace. I don’t have the definitive answer but I do have an opinion.
Why is it that a property can sit on the market with little-to-no activity in the hands of one broker and then sell quickly when the broker is changed? It happens quite frequently so it can’t be just luck. I think that often times, a true understanding of the investment and why it makes sense for the target buyer is missing. More importantly, the ability to articulate the opportunity in the way the message needs to be heard by the target buyer is missing. A property can fall into a broker’s core product type (i.e. retail) but be miles away from being anywhere near the asset type from the other properties in that broker’s invenventory. We see it all the time. For example, we’ve all seen brokers that may specialize in a certain niche (i.e. strip centers in Central California) send out marketing emails for a single tenant ground lease they are selling in a market other than their own. In the past, the strength of the market would get the deal sold at a great price. Those days are over, in my opinion. I think we are heading into a market that will reward niche specialization and be highly rewarding to outside-the-box thinkers. Truly understanding the opportunity and the ability to create the appearance of scarcity in crafting the story of the opportunity is imperative. Bigger will not necessarily mean better as clients will be looking for boutique services and a customized and personalized investment strategy – on both the acquisition and disposition side of the business.
Just this past week we were looking at a property that has sat on the market for almost 1 year with no activity. We were scratching our heads because the asset is clean and the buyer pool for this product type is deep. Our “rookie” was the one who blurted out the correct answer when he said “these guys are just not telling the right story”. I have had few prouder moments in the business.
No comment yet