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There Is A Premium for Off-Market Deals

The investment sales panel at Allen Matkins annual View From the Top says off-market deals are generating higher price tags, especially in Asian markets.

By Kelsi Maree Borland | kelsimareeborland | Updated on September 12, 2017

Sales strategies for office product are moving off-market, according to brokers and investors on the Investment Sales Experts panel at Allen Matkins‘ annual View From the Top conference, held yesterday at the Beverly Hilton hotel. The panel brought industry experts Kevin Shannon, president of West Coast capital markets at NKF; Darla Longo, vice chairman and managing director at CBRE; Chris Graham; managing director at the Blackstone Group; Tracey Murphy, executive VP of life science and Northern California at Kilroy Realty Corp.; and David Thomas, principal at LBA Realty, together to discuss real estate investment trends, where buyers and brokers agreed that off-market deals or select-marketed deals are garnering higher price tags than fully marketed transactions.

“I think there is an off-market premium,” said Shannon on the panel about institutional-quality or other large deals. “The Asian’s like the off-market deals, and we have done enough where we know where pricing is going to shake out. With those deals, the story helps.” He added that the team does market most deals to a select group of buyers, and focuses on Asian markets where “there is a lot of capital seeking a home in L.A.”

Longo agreed that off-market deals are getting higher pricing, especially for larger properties. She focuses on industrial properties, but is seeing a similar trend, especially from Asian buyers looking for industrial product. “Asian buyers take longer to make decisions,” she said on the panel. “They are new to the industrial space, but they are going to be a huge capital driver behind the scenes on the bigger deals. We are seeing a lot of capital that is coming into the development side of industrial real estate. We are seeing that pension advisors have also shifted to capture some of the industrial yield.”

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