What the H Does “Off-Market” Mean Anyway?

Posted: November 30, 2016 by Eli Randel

WHAT THE H DOES “OFF-MARKET” MEAN ANYWAY?

What makes a deal “off-market” when the offering is being shared on LinkedIn or broadcasted (“marketed?”) on real estate search engines and web platforms designed for mass distribution?

Once, an off-market disposition strategy was generally employed for speed or discretion. A seller would show a deal to a select few known-closers to: dispose quickly; “save” a small broker fee; or avoid alerting sensitive parties to a sale. The buyer would receive an exclusive (or semi-exclusive) look at a deal in exchange for confidentiality and speed. Sometimes Buyer could negotiate an opportunistic price for their willingness to navigate unique situations or a discount could be a result of Seller failing to price the property in the open market (offsetting any “saved” commissions).

Today “off-market” deals are broadcasted and promoted on social networks, real estate search engines, and mass marketing campaigns to unknown entities. Where the deal type was once Match.com – a way for qualified and compatible parties to privately connect – the off-market space has sometimes devolved into Ashley Madison – a forum for nebulous characters and activity.

When thousands of buyers can access the same deal, what makes it “off-market” and what other challenges and questions emerge?

  • How many other buyers are reviewing the opportunity, and how many have already walked away?
  • Is there a daisy-chain of brokers and platforms “representing” the deal and opening the door for fee disputes and market confusion?
  • Am I negotiating with a party that has any authority with Seller? Will a potential offer be properly received?
  • Is the provided deal information: based on reasonable assumptions, from the seller, and accurate?
  • Is Seller motivated or did they simply tell an inquiring party: “I’m not in the market, but I would consider selling if I could get (insert unreasonable price)”?
  • Is the deal a repackaged version of someone else’s listing?

While true off-market circumstances still exist, should be taken seriously, and there are great brokers who have unique access to those opportunities, the unfortunate reality is most often the term is used as click-bait for a party to either a) engage with buyers when a lack of an exclusive listing won’t allow them; or b) to give sizzle to an otherwise less-than-executable deal.

Instead of looking for a needle in the large and sometimes deceptive haystack, go to www.crexi.com. CREXi is the best way for buyers to utilize technology to discover REAL commercial deal opportunities with the nation’s best brokers. Our aggregated marketplace has over 5,500 verified listings (and exponentially growing). Speaking with the top listing brokers and demonstrating an understanding of the market and an ability to execute, remains the best way to get exposed to every deal in a market including the oft-elusive truly off-market opportunity.

Eli Randel

Eli Randel is Director of Business Development based in CREXi’s Miami office. Eli spearheads CREXi’s growth and sales throughout the east coast as well as overseeing the national sales team. Prior to joining CREXi, Eli was director of dispositions for Blackstone’s Invitation Homes. Eli has also held management positions and production roles with Cohen Financial, Auction.com, LNR and CBRE where he began his career spending three years in Investment Sales before leaving to obtain his Master in Business Administration from the University of Florida. 

Nothing Is Easy

Team CREXi – November 22, 2016

Besides being gluttons for punishment, yearning for higher hairlines and larger bald spots, and aspiring for less taxes in the form of lean salaries, we at CREXi are here to bring technology to the slow-to-adapt commercial real estate market. “But Eli, I’m a real estate purist, does the CRE industry really need technology to be great?” you might ask. My answer: “No.” Commercial real estate is already a great industry. My favorite industry. As the son of a real estate investor and entrepreneur, I owe any business prosperity in my life to the CRE industry. However, I learned a valuable lesson as a child when my father would announce every night while walking in the door: “Eli, nothing is easy!” As my life and career progressed, I learned truer words have never been spoken. So how can we make the lives of our clients and customers easier?

DEAL CONDUITS

There is a supply and demand disconnect in the commercial real estate market. Sellers and their brokers always want more buyers and offers for their dispositions while buyers always want access and exposure to more deals. Both sides of the transaction are searching for each other yet often fail to connect. CRE has long been a high-barrier-to-entry market with opaque information. When new investors flow into new markets the common strategy remains: take every broker out to lunch for six months to ensure you are receiving all of their offerings. Having seen the waistlines of some old broker friends, those lunches aren’t always cheap. Our aggregated marketplace of 5,500+ deals allows buyers to quickly find inventory and download information following the one-click execution of an NDA as opposed to waiting for a response to an e-mail or phone call. You can find available properties and obtain information in minutes not days. Brokers also have a forum to reach and curate their listings to a wider audience than the local buyer pool and directly target our exponentially growing user pool of current and active commercial real estate investors.

ONE STOP DEAL MANAGEMENT

Real estate is still a mostly pen-and-paper industry which is time consuming and inefficient. The disposition process is rife with pain points. Most brokers are using 3-6 often expensive platforms to run their process and usually employ a staff of 2-3 team member for support. We’ve created a platform that will speak to every one of these pain points all in one intuitive easy to use web location. Game changing features are in development and will drastically simplify the entire process and transaction work-flow. Contact us for a demo.

SPEED

Commercial Real Estate remains a relatively illiquid asset class. Deals typically take 6-9 months from the first broker meeting to eventual closing. We aim to speed up transactions by eliminating inefficiencies and large chunks of downtime associated with slow information flow and antiquated processes. As famed investor Sam Zell says: “Liquidity Equals Value.” We aim to add value to the commercial real estate process by speeding up deals.

Nothing is easy, but we hope to make transactions easier.

 

Feel free to reach out anytime to “geek-out” over CRE or CRE Tech @ eli@crexi.com or 305.331.2881. Resumes are always welcome to those interested in joining the mission.

Coming Soon in our Weekly Blog:

  • Data-less 2017 Market Predictions (Analysis Without Paralysis)
  • What the F Does “Off-Market” Mean Anyway
  • A week in the Life of an Offering Memorandum
  • When Going Hard is Bad
  • Forget Hillary, Where Did My 30,000 (Marketing) E-Mails Go
  • Tinder for CRE
  • Thanks For the Listing, See You in Six Months

 

4 Ways CRE Technology Has Changed the Deal Flow Process for the Better

Executing a CRE deal from start to finish these days is a far cry from what it was even 5 years ago. From the variety of online mediums available to market properties to having the ability to sign legal documents electronically, all aspects of the business have been transformed by technology.

Technology’s goal is to make our lives easier as well as give us access to goods and services previously unobtainable.  The same is true in commercial real estate.  The rapid pace at which information is exchanged and the accessibility of such information is a major factor in improving and streamlining the deal flow process.  Technology mirrored after other industries as well as new apps and platforms created specifically for CRE is a stark contrast to the traditional methods utilized by CRE professionals in the past. Here’s a rundown of some game changing technology.

Drones and 3D Imaging

Our ability to communicate property details via images has been revolutionized with the advent of 3D imaging and the application of drone technology to real estate.

3D images have a range of uses in CRE, but marketing is its most common application. They make it easy to instantly share 3D models and floor plans that do more than a verbal description ever could. These are also useful for planning renovations or new developments by allowing a potential client/buyer to envision the finished product.  Sites like Floored offer interactive 3D models, video fly throughs, and more.

Drone footage is a unique way to present visual information. It’s changing how CRE thinks about property tours and site selection. These “unmanned aerial vehicles,” can be used to photograph properties from previously unavailable viewpoints. They provide a new perspective on building size and situation for buyers, whatever their geographic location.

Sensors

Another very powerful tool that generates a wealth of data for CRE is sensor technology. The information they provide can be applied to tasks like site selection, property valuation and market analysis.

Sensors that measure pedestrian or vehicle traffic accumulate data over time that provides useful information. It can be used in conjunction with transit data for an even more robust picture of a given property. 

Sensors are also integral to the idea of “smart buildings.” Sensors can monitor everything from HVAC usage to moisture levels, and make properties more energy efficient.

Each of these tech developments is a part of the rapidly growing Internet of Things, which uses an army of devices to automatically and constantly gather useful data.

CRMs

Another technology development that is significantly impacting the deal making process is the evolution of the CRM platform. Managing and tracking property listings, contacts, marketing data, and deal progress on a centralized platform eliminates redundant tasks and missed opportunities by increasing visibility to industry decision makers that wasn’t possible not too long ago.   

CRM platforms manage contacts and prospect lists, and include detailed insight on their demographics, preferences, and past interactions. Many platforms can also facilitate lead generation and enable automated email.  CREXI takes it a few steps further by offering their clients an extensive toolbox of innovative marketing and sales tools from which to choose, all complimentary for the user.   

Another benefit of CRM is that it’s housed in the Cloud, so users don’t have to use valuable space on their hard drives nor does it require users to download or install additional programs.

Transaction Management

Most aspects that encompass a CRE transaction can now be handled online via CRM platforms. Owners, buyers, and brokers have the ability to interact in a secure environment, and track activity and interest in multiple properties from one centralized location. Once a deal is agreed upon, due diligence documents can be shared and updated instantly, decreasing the typical drawn out turnaround time. 

Another major advantage of online transaction management is transparency. All of the players in a transaction have the ability to access up to date information on demand, throughout the transactional process.  Removing this often cryptic layer from the proverbial playing field, is a benefit to both buyers and sellers by allowing them to work smarter rather than harder. 

CREXi users can see real time updates on offers and the due diligence progress, as well as generate comprehensive reports containing complex data and analytics pertaining to a property. The timesaving power of this approach is incredible and promotes news ways of determining property value and stimulates idea sharing and collaboration. 

This ever-changing technological landscape continues to prove that knowledge is power.