Hello all again…I have recruited a large pool of private investors equalling $10 million in angel funding. My question is…where do I find listings of properties in the 20-30 million dollar range for new england? I tried CCIMnet, Loopnet, Realtor.com, Gomberg Report, and Remax, Coldwell Banker, Etc. and cannot seem to find very many properties that are of this size in my region…I find a handful in the US listed, but I know that they are all around me, just not sure where to look. Any ideas?
Putting semantics aside as to what is ‘big’, I offer the following on finding financially sizeable ‘class A or B’ investment properties.
Class A & B assets are the most desireable for institutional investors who trade in 2 - 5 year business plan horizons. They are easy to underwrite, provide high return for little risk, and minimize the amount of negotiations needed over NAV or other peripheral issues. These properties are regularly AND frequently turned in off-market transactions either in one-off deals or as part of portfolio disposals/acquisitions.
Where do you find them? Whilst the occassional ‘desireable’ asset may show-up through a traditional local brokerage service, your more likely to find ‘target’ opportunities by interacting with the business managers of the institutional property owners/traders, funds, REITs, etc., bearing in mind that these firms will have competent underwriting teams and strategic business plans that determine when and how they acquire and dispose of assets - including those at a discount to NAV.
Who are these owners? Firms like GE Commercial Finance Real Estate, BlackRock (formerly Merrill Lynch), MetLife, Citibank, HSBC - yes even in New England, Heitman Funds, and in the Boston area - Flatley Company.
A deal, if there is a deal to be had, often originates - as a result of business plan triggers, within the middle management staff contacts between firms, associations with non-institutional real estate players, boutique firms. It is less about being associated with a big name house and more about simply being ‘known’ in the market as a knowledgeable and importantly - a credible player.
If your organization is known as an often low or unsuccessful bidder, institutional sellers of class A & B asset will keep you in the loop if they, a) know your investment profile/appetite, b) you are viewed with confidence, and c) you do not represent some sort of risk by association, e.g. reputational, unsavoury dealings, money laundering, less then skillful business peer(s), etc… Remember, they have annual and often quarterly income and investment targets to hit and to do so they need to constantly recharge their portfolios which means maintaining and working an extensive network of buyers and sellers.
As a first step I would suggest getting yourself and your firm in front of the institutional players by offering free commercial market analysis presentations (keeping in mind you have to be knowledgeable and minimize the sales pitch material). Be specific, focus on what you know best, and ensure that your material is sufficiently ‘granular’ to demonstrate you know what your talking about.
Secondly, getting on their guest list for client/investor events such as cocktail parties that are often held 2 - 3X per year where middle managers/deal professionals can network with buyers & sellers, clients, auction professionals. In addition to being great fun these events are where deals are often given birth and you will hear before the open market does about not just one asset but a range of associated pending or prospective investment opportunities, e.g. B piece financing, tranchs investments, JV opportunities, choice targets.
There are business plan and funding cycles driving acquisition & disposal timings. If you can learn when these cycles occur for a particular investment house the more likely you are to be aware of critical events. For publicly traded institutions pickup a copy of their annual reports. This will give you some insight into funding cycles.
Thirdly, think about creating business ‘enabling’ associations or opportunities with the institutional investors where you can create value that they would otherwise not be able to crystallize for a number of reasons, e.g. lack of interest, internal staff resources too thin, non-core activity, absence of experience with a certain asset class/service/market entry issue(s).
Outsourced services like ‘active’ (driven by tax considerations) asset management, post-closing follow-up on pre-closing action items like having asbestos removed, coordinating a refurbishment that was a condition to closing and the economics, facilitating the sale of the asset at the end of the business plan, are partnering initiatives that add demonstrated value and can lead to broader opportunities.
Happy to help further and a representative from our group will be in Boston 21 - 30 November.
UnderwritersTrust
London
Kris,
I would go to the www.CBRE.com site. That stands for CB Richard Ellis. Create your account and start a search. Check of A and B class properties. If you don’t see what you’re looking for get in contact with a investment pro.
rws