Is it possible to acquire a property from a public REIT through an off-market transaction?

I was taught early on as an acquisition guy not to waste time attempting to negotiate purchases off-market with public REITS, due to their fiduciary obligation to market each deal to assure competitive pricing is met.

Has anyone ever been successful buying from a REIT through a non listed sale? Can anyone who works or has worked for a REIT shed light on this idea from the REIT's POV?

Is it cut and dry or are there any nuances? If the offer to purchase was above market pricing, wouldn't the REIT need to at least consider it?

 
Best Response

I used to work for a REIT. Yes, you are right, they have a duty to market the property and get competitive bids. We were told by our legal team that we should always market the property because we run the risk of it coming back to bite us in the ass. To be honest, REITs get the best possible price when its marketed to everyone, if they try to sell off-market, it can give an activist or a bunch of pissed off shareholders more reason to kick the management's ass out. So management will not sacrifice their bonuses or more importantly their job security on something like this.

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