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Finding off-market commercial real estate deals has always been complicated. These are deals that are not advertised, for reasons including:
- the desire to appeal to buyers who don’t want to compete with the open market.
- buyers and sellers prefer to keep the transaction private to prevent speculation as to why they are buying or disposing of an asset.
- sellers have a particular price in mind for which they are willing to wait, and properties that spend an extensive amount of time on the market can lose value.
Once a property has been identified, there is still a rather lengthy verification process, which can involve signing a confidentiality agreement, followed by the requisite due diligence on the property. Buyers are required to prove their identity and ability to pay. Many of these documents pass through attorneys and other services, adding more time to the process.
Advertising your interest via networking
The first method to try whenever you need information is to consult your professional network. Depending on that group’s makeup, they may be able to point you to some great off-market properties.Contact people who might have access to that kind of information, and put the word out that you’re interested, using social media. You can even put a line below your email signature stating your interest. It just needs to be seen by the right person at the right time to get results, and it certainly won’t cost you a thing.
Online research
You won’t find off-market properties with a Google search, but the Internet is nevertheless a valuable tool for this job. In just the last couple of years, technology has been developing specifically serving the CRE industry.Real estate crowdfunding is a rapidly growing area in online transactions, with sites like FundRise and RealtyMogul managing thousands of listings, and connecting buyers and sellers from around the country. This approach is changing CRE investment by allowing more buyers access to more deals than was possible before.
Still, the deals those sites provide do not include the elusive off-market properties. This required the creation of a different kind of site, one that can provide sellers with privacy as well as help buyers to qualify. This is, in effect, a private marketplace for real estate. Brevitas, for example, verifies both buyers and sellers who register with the site, so that process is already done before a deal is even considered.
This helps sellers feel confident about the privacy and security of doing an off-market deal online. The site offers private listings from the U.S. and international markets, and then provides a document lockbox to facilitate sharing and provide access –to those who are authorized. The site lists billions of dollars in assets.
Hire an informed broker
Another way to get access to off-market commercial properties is to work with a broker that specializes in them. A professional will have a wide industry network, and will be privy to information on private sales. Particularly for buyers just entering the market, a broker can be invaluable for identifying appropriate off-market properties and navigating the negotiation process. All of the major brokerages in the US have access to off-market listings and can help uncover opportunities for you.While finding off-market commercial deals is still more complex than basing your search on public listings, it can often yield excellent properties and sellers willing to negotiate. Without a doubt, they’re getting easier to find, thanks to platforms that protect privacy while also making the whole process more efficient.
