Obviously there are many transactions that occur each day.
I am just curious to why all these "smart" people in the industry would sell a property that they think is "good."
Based on your experiences, did your firm ever question why a company was selling a particular property, and if so, why?
Should one be hesitant to buy from a seasoned owner? Thanks
1 Example - selling/buying involving larger institutions: Buying a building from Sam Zell(800 6th ave), Selling to Blackstone & Brookfield (why not keep it if they want it?) Eyal Ofer buying from Jamestown, basically any big transaction as one example. Who wins at the end of the day? How much of it is fund related?
My opinion: 1-3 main reasons, maybe 4-5 others
You buy it for your fund objective, you meet the objective returns. Example, you have a value-add fund, so you underwrite 10% returns, 3 years later you achieve business plan so you get out. Anecdote here: I've been at a very large firm that had portfolio managers from different strategies wanting to bid on assets from another portfolio manager as they became stabilized.
You're a family office and the head of investments suddenly decides he/she doesn't like this sector/market/asset, so you sell.
Best case scenario, you're a PE fund with limited capital and your're willing to trade out of a 20% return asset to get cash for a 30% return asset without having to call capital.
A few other reasons, but theses are tops that come to mind.
Because I want to get fucking paid. My % of profit isn't realized until sale. None of that monthly cash flow goes to me.