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?
Quite obvious that you have a specific property in mind. Why don't you stop being a faggot and email their head of dispositions?
yes
In my experience, the only assets REITs are willing to part with are the trash they are left with after large portfolio acquisitions.
I work on the investment team of a large public REIT ($5-$10B Mkt Cap). Yes, it is possible, and there is no reason why a REIT has to go through a marketing process. As long as management feels like it is in the best interest of the shareholders the fiduciary obligation is met.
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"jungle bunny" - love it
Bump, but curious about lifecos rather than reits. Does their internal processes probihibt off market / direct deals? TIAA, Pru etc
It's cut and dry. If it is a fair offer, they will take it to investment committee and vote to sell or not. If you can dispose of a property without having to hire a broker and pay fees why not.
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.
In real life, property developments often have much lower returns because sale prices and cap rates are unpredictable; projects also tend to run over-budget and behind on schedule.So when you project a REIT, you use the cap rates, NOI, and property values of entire property segments to estimate what happens in each category above.
^ where did this guy come from...?
Anyone here have luck buying direct (off-market) through a public REIT? (Originally Posted: 04/17/2017)
Been told countless times that public REITS are restricted by their boards from selling assets unless they are market tested through a listed process. Never worked for one, and never really tried approaching one directly, but wanted to see if this fact or fiction.
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