How To Know Which Buyer Will Get You The Highet Price in the Quickest Time

"New York City (retail) rents are outpacing inflation, so we’re Bullish on the asset class,” one investor told me this month, “but the property needs to speak to me.”

So….the property needs to speak to him…..ok…

Getting a buyer to tell you what excites them about a deal can be impossible. Most of the time, they can’t explain it, because they’ve never really had to. That’s not their job. They just know it when they see it – um, hear it.

There are some general truths – like most buyers get excited when can see a way to increase the cash flow, decrease the expenses, or both for a property – but these things usually don’t separate one buyer from the next so much. If one buyer knows a few physical improvements will increase cash flow, then it’s not hard to find another buyer who believes the same. So what else makes a buyer feel excited about a property? Here are a few thoughts:

1.? They need to first understand what they’re really buying. For instance, does the buyer understand whether the retail space is more of a showroom or a distribution center? A showroom is meant to get as many people as possible into the brand's Omnichannel network, in other words to continue purchasing from the brand online or at other store locations. Apparel brands, restaurants, grocery stores, and banks all benefit from stores that generate online sales and engagement. With a distribution center, on the other hand, a costumer can only get those goods or services at that physical location, as is the case with a nail salon, dental office, or gym. A property may also offer a combination of the two. This can be tough to understand, because some buyers really understand urban retail & OmniChannel retailing, while some are just starting to understand it, as are some brands. In fact, every brand is constantly trying to stay on top of this evolution with millions of dollars at their disposal and many still don’t hit the mark, so there is no reason to expect the average buyer to fully “get it.”

2.? Has this property ever been available in a last 5 years, 10 years, 50 years? This is probably the biggest “value add” there is. It’s pretty tough to make more retail space in Manhattan, and there are more irreplaceable properties here than in any other U.S. market.

3.? Who are they buying from? Are they going to be able to make a deal here, or is the paperwork going to be nonexistent, leading to surprises or obstacles cropping up later on? Deals beget deals, so will this deal lead to more deals in the future?

There are probably a few more that I am missing, but my point is that sellers need to understand the potential buyers in order to get the highest price, in the shortest amount of time. And that IS exciting.