Written by | Jerry Ford
Sometimes, all we need to do is hear that a property owner is interested in selling and a deal is in the making almost instantly. I guess that’s what you get when you’ve been in the investment real estate market for what seems like forever. Those kinds of deals are based on the right connections and familiarity.
Case in point: a couple of years ago the director of a local development company mentioned to us that his firm was considering selling a property—one that we helped them buy and develop several years prior with the help of federal and state historic tax credits. Within moments, a price was established. We then reached out to a pair of young investors—native Richmonders, now living in Miami and Washington, D.C. Within four months, a deal was settled.
Fast forward about a year and that same seller was back with a 56-unit apartment building. But this time, they decided to make things interesting–by stacking us up against a nationwide firm to compete for the listing. That competition didn’t last long and immediately we were tasked with tracking down a suitable buyer for the property, the most logical of which was … you guessed it—that same duo we paired them up with previously. And based on the success of their previous investment, those buyers jumped at another opportunity. Within 120 days, yet another deal was done.
Now, you’re probably wondering—if the same two parties came together for a second time, why didn’t they just approach one another directly in the first place? And the answer is: They know that commercial real estate deals don’t just happen overnight. And they don’t go down easily. There are plenty of roadblocks along the way that can slow down or even derail a closing if you don’t know what you’re doing. Take, for instance, new zoning laws that have arrived since the original development of a property, or existing loans with overly large prepayment penalties. And add into the mix attorneys, lenders, management companies, defeasance specialists and inspection contractors—only a local firm with more than 75 years of collective experience knows how to guide an entire team to a speedy closing. I guess you could say that a commercial real estate deal is one of those instances where it pays to be the old (and wise) guy in the building. Or the city.