In any economy, challenges in commercial real estate are plenty — unpredictable rates, waning demand, and expiring loans. For example, the St. Louis Fed estimates that roughly $1.7 trillion in CRE outstanding debt is expected to mature between this year and 2026. Borrowers looking to refinance may face higher debt payments, which can result in an increase in defaults and off-market properties.
Whether you are an investor, developer, broker, or even a contractor, finding off-market properties in commercial real estate, such as defaulted bank properties, can potentially be a unique opportunity to grow or diversify your CRE portfolio or employ your company’s services.
Here we take a look at the advantages of off-market commercial real estate and how to find off-market deals.
What Does Off-Market Mean in Real Estate?
In general, when discussing residential or commercial real estate, and you hear a property is off-market, it means one of two things: It is not currently for sale, or it is for sale but not listed publicly.
On-Market vs. Off-Market Commercial Real Estate
On-market meaning in commercial real estate indicates a property is listed on a commercial information exchange (CIE), and a licensed real estate agent/broker is involved.
Off-market properties in CRE refer to those that are for sale by owner (FSBO) or sold through an auction, such as foreclosures, or a property that is in financial, legal, or physical distress. It can also refer to properties that are simply not for sale.
FSBO and bank-owned types of off-market CRE may or may not use a licensed real estate agent, which could eliminate commission costs of up to 8% of the closing price of the property. Some reasons sellers opt for off-market versus listing properties:
Increased control over the sale process (who buys the property and when the sale closes)
Avoid paying commission fees
Off-market properties can be sold as is
Increased privacy for seller and buyer*
*Real estate transactions and real property ownership in the United States are part of the public record.
Advantages of Finding Off-Market CRE Leads
Off-market commercial real estate leads (or listings) bring many advantages, including less competition, flexible or lower pricing, exclusive opportunities, and potential for value-add.
The specific benefits of CRE leads are dependent on your role in commercial real estate. For example, a CRE broker may save their client(s) time and money with off-market properties that allow the broker to negotiate directly with the seller.
On the other hand, an investor may find off-market leads with a smaller pool (if any) of competing buyers, lessening the chances for a bidding war. This lack of competitors may allow an investor to perform due diligence before buying a property, plus provide anonymity between the investor and seller if privacy is wanted or needed.
Similar to that of a CRE investor, a developer can appreciate fewer competing buyers that off-market CRE leads offer.
How Do You Find Off-Market Properties?
There are several strategies for finding off-market CRE properties. Of course, you could drive around an area and attempt to find and contact property owners with offers directly.
Although this approach may bring about an off-market CRE deal, you're more likely to generate rejections ... or be ignored.
Other strategies for finding CRE deals take time, like building relationships with owners, investors and property managers through local and industry-related networking events and forums.
Biscred's CRE database has proved to be a time-saving and highly efficient approach to finding property owners. Our clients use it to target specific CRE companies and professionals, whether they are looking to buy new properties or offer goods or services to property owners and managers.
Our datasets contain contact information and details about more than 330,000 companies and 1.35 million people who work in commercial real estate and CRE-adjacent industries (HVAC, banking, service providers, etc.).
Here's how it works:
Start a Criteria Search: Set company industry to include property owners and their agents, such as REIT, operators, and property management.
Enter more search parameters: Use Biscred's other filters to narrow by geographic area, company industry (hospitality, office, retail, etc.), company size and more.
Select your contacts and save: Create a list in Biscred and name it; for example, call it "large REITs in Chicago" for real estate investment trusts that own more than 100 properties in the Chicago area.
Download your enriched data: Download all or select the records that you want to download, and then upload them to your CRM or targeted advertising platform of choice (LinkedIn or StackAdapt, for example).
Get started with Biscred. Schedule a demo, and we'll show you how it works, tailored to your business needs.
ID 159233135 | Khwaneigq | Dreamstime.com
Opmerkingen