BENEFITS OF AN EXCLUSIVE LISTING VS SELLING “OFF-MARKET”

THE CHALLENGE

Showing the client that listing their net lease investment properties with our group on our proven national marketing platform will yield a better result versus marketing it off-market.

We came to an agreement with the Seller to allow our team to market two nearly identical net lease investment (NNN) properties simultaneously. Both CVS investment properties were in similar markets of South Florida, and both had 15 years of lease term remaining on absolute triple-net leases. The catch: One property would be listed and the other would be marketed in an off-market setting.

OUR APPROACH

With the listed property, our group had approval to spend money up front to build a professional and very detailed offering memorandum, complete with high resolution aerial photography. In addition, since our team was protected via a signed exclusive listing agreement, we would be utilizing our large proprietary database of investors via our national marketing platform. This ensured the property received maximum exposure to a national audience. Most importantly however, this strategy offered consistent exposure of the property to the private capital in the market who execute 1031 tax deferred exchanges, paying the highest premiums for net lease investment properties due to time constraints and tax pressure. This approach also exposed the property to all of the investment brokers nationwide who were representing a potential buyer.

For the off-market property, we constructed a very basic 1–2 page Executive Summary with only a Google aerial, a location map, lease terms and pricing summary, and some highlights. We immediately sent it to some likely investors that we trusted for consideration. Since we weren’t protected by a formal listing agreement, we did not send the property to any investment brokers for fear they would go around us and try to go direct to the Seller. From here the marketing process became very reactive versus pro-active, and the property sat on the sidelines until we located a qualified potential investor looking to purchase a CVS investment property via our day-to-day dealings.

THE OUTCOME

We were able to generate 5 aggressive offers on the listed property versus only 2 offers on the off-market property. The offers we received on the listed property were significantly higher in purchase price, as they were all from private investors in 1031 tax deferred exchanges. The benefits of the marketing we were able to do for the listed property proved to be financially beneficial to the Seller as well.

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