3 Tips for Sourcing Commercial Real Estate Opportunities
One of the first questions that most commercial real estate investors have is: How do you source new opportunities? Unfortunately, there’s no simple, one-step answer; rather, it comes down to several variables that can cumulatively be used as a universal guide within the commercial real estate space. Once you’ve mastered these few steps, there are endless sources of investment opportunities that can result in a steady stream of deal flow.
Here’s 3 tips that we use for sourcing commercial real estate opportunities:
1. Identify Criteria for Your Ideal Investment
At our firm, our ideal investments lie within secondary growth markets, with populations of 500,000+ residents but outside of the traditional Gateway Markets. We typically operate within the traditional office, medical office and flex sectors, though your criteria for an investment may be found within another product type. Regardless of the type of asset you are looking for, there will always be a brokerage team that focuses on that product type and is incentivized to put their opportunities in front of credible buyers.
2. Create an Extensive Brokerage Network
Developing an extensive brokerage network is critical, and should be one of the first steps in seeking commercial real estate deals. If you’re just starting out in the commercial real estate space, you’ll want to begin to research the teams that cover the markets and product type that you’re interested in. For commercial assets, this is often large firms such as JLL, Cushman & Wakefield, CBRE, Colliers International, and Newmark. You can simply reach out to these companies by cold calling or emailing to let them know what you’re looking for. As a follow up, we suggest adding them on LinkedIn and ask to be added to their distribution list after you touch base. Creating these relationships will often be a great launching pad for new broker introductions and will continue to generate new opportunities.
- Rely on Your Brokerage Contacts
Most real estate professionals don’t have the time or resources to cold call sellers for each deal. Not only will your brokerage network provide new opportunities, but they will also act as a resource for market research (market leasing assumptions, leasing velocity, sales comps, etc.) and help with pricing guidance to get the seller’s attention and begin negotiations.
3. Get a First-Look
Once you have expanded your brokerage network and closed on one or more transactions with a broker or group, you will likely be given access to “off-market” deals, meaning a first-look at deals before they are blasted to a wider audience. Off-Market deals tend to have much less competition, oftentimes have advantageous pricing (although that’s not always the case), and are usually a cleaner and much quicker process. Experience and track record really come into play for these types of opportunities. If you’ve already formed strong relationships with your brokerage network, finding off market deals should be considerably easier, as brokers know what kind of assets you are looking to purchase and know that you are a reliable closer.
Where to Begin
Sourcing deals in commercial real estate can be one of the biggest barriers for those getting started in the industry, and without the proper first steps, it can seem like an impossible task. However, it’s likely that you already have exactly what you need to be successful in this space, it just comes down to 1) identifying a market that fits the needs of your specific criteria 2) cultivating relationships with an extensive brokerage network and 3) eventually taking your business to the next level with off-market deals.
While every investor has their own method of sourcing deals, these are a few tactics that we’ve found to be beneficial and provide an excellent foundation for growth in the commercial real estate space. If you’re interested in learning more or have any questions, please don’t hesitate to reach out.
If you are interested in learning more or have any questions, please do not hesitate to contact us.
Real estate syndications and funds are two excellent entry points into the world of commercial real estate, but is one better than the other?
E-commerce has been a main driver behind this positive pattern. Beyond E-Commerce: Trends Driving Industrial & Logistics Development
A real estate private equity firm that owns and operates high quality multi-tenant office assets in emerging secondary markets.
Interested in learning more about Excelsior's investment opportunities?
Under no circumstances should any information presented on this website be construed as an offer to sell, or solicitation of an offer to purchase any securities or other investments. This website does not contain the information that an investor should consider or evaluate to make a potential investment. Other materials related to investments in entities managed by Excelsior Capital are not available to the general public.