|
7.25.2006
Perspective: Portfolio Sales
Commentary by Ben Ng:
Over the past year, I have seen and experienced how a portfolio sale presents a unique challenge to any real estate firm. As these properties are each sold, they provide an interesting perspective and newfound insight on how the commercial real estate market reacts and adjusts. In the past year, our San Francisco office has marketed 68 properties as part of portfolio sales (a cumulative total of approximately $60M) . We currently have NNN-lease portfolios of Wendy’s, Jiffy Lube, and Taco Bell properties on the market. We put our current portfolios on the market at the beginning of this year (Jiffy Lube late 2005). At that time, the 10-year treasury was hovering around 4.60%. Since then, interest rates have been ticking upwards. As of today, the 10-year closed at 5.06%. A 50 basis point jump is a significant enough increase to cause investors to pause. With the shifting of the market, Capital Pacific worked with sellers to adjust pricing based on market conditions, and because of this, property sales of our portfolios have not slowed down. Here are what I believe to be the keys to success in portfolio sales: - Deliverable Product: Do your due diligence, disclose as much as possible to buyers, and don’t waste anyone’s time.
- Efficient Marketing: Know who the potential buyers are, target them with an exceptional message.
- Qualification Process: Interview the buyer: what are their motivations? Are they in a 1031 tax-deferred exchange?
- Streamlined Escrow: Know the deal, solve problems up front. Problems don’t kill deals. Surprises do!
|
