I am looking at a few OMs on some retail and multifamily properties >$20MM and these OMs have a lot of wrong info from nonexistent rents to even getting the damn parcel number wrong. What is the worse case of "Broker Numbers" have you come across? What shop makes the worse sausage?
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All of them. If you're using a broker's assumptions beyond the address of the property, you're going to lose money. Assume everything is wrong and you'll be closer to reality.
Why do you hate us much? jk. Most of us are just perennial optimists.
I think most of you (or investment sales brokers, at least, I don't know what part of brokerage your in) are willing to stick your head in the sand and accept any assumption your clients give you, if it leads to a bigger number on the OM. Why do more work than you absolutely have to? You don't bear any responsibility for misinformation or lying, as long as you can say you didn't come up with the "facts" on display. The entire system is set up to incentivize brokers to do as little diligence, and ask as few questions, as possible.
I always assume the brokers assumptions are BS but sometimes the numbers in there are just plain wrong. Like 2+2=5 not overly aggressive rent growth.
I mean there are jokes about MM pitch decks….. but honestly, any/all can be circumspect. Think of it this way, if broker OM’s could be trusted, buyside firms wouldn’t need analysts and associates to build models! So everyone is in this together to keep everyone employed!
The OM is for the client. Brokers know their numbers are bullshit, and they'll tell you that. The good ones will shoot you pretty straight on what you are buying on a going-in basis. They're market makers not Howard Marks, but I do find the BOV underwriting they do for us is pretty darn good.
This ^. Clients often award deals based on which group produces the best value, so we are incentivized to make aggressive assumptions. Then when you take a deal to market, you have the client asking you to push further in certain areas. The same groups that want aggressive assumptions when they sell are also buying, so it cuts both ways, we are just the middle men making a market.
All it takes is one baby!
Marcus & Millichap - they don't even have numbers in their OMs
I see one monkey from it throwin shit at ya
Not sure about accuracy of numbers, but JLL by far always have the best formatted OMs in my personal experience.
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