Off-Market Listings | The 411 for CRE deal makers

In the bustling landscape of commercial real estate (CRE), "off-market" or "pocket" listings offer a unique avenue for transactions. Both brokers and investors should understand this concept to maximize opportunities and strategize accordingly. This article aims to explain what off-market listings are, and the various scenarios where they prove beneficial.

What Are Off-Market CRE Listings?

Off-market listings, often termed "pocket listings," refer to properties that are available for sale but are not publicly advertised or listed on mainstream CRE listing platforms. Unlike traditional listings, these are exclusively shared within private broker and investor networks and relationships.

When Should CRE Brokers Offer a Property as an Off-Market Listing?

The decision to offer a property as an off-market listing can be strategic and situation-dependent. Here are a few scenarios when this approach can prove beneficial.

• Privacy Concerns | High-profile transactions may require a level of confidentiality that is impossible to maintain with public listings.
• Targeted Sales | When a property is unique and appeals to a specific type of buyer, a broker might opt for a targeted approach rather than casting a wide net.
• Testing the Waters | If a property owner is considering selling but is unsure about market reception, an off-market listing can serve as a low-risk way to gauge interest.
• Quick Sales | For property owners looking to sell quickly without going through the elaborate process of marketing, off-market listings can expedite transactions.
• ‍Client Relationships | Brokers with a strong network can use off-market listings as a way to offer exclusive opportunities to clients, thereby strengthening long-term relationships.

How Do Investors Benefit from Off-Market Listings?

For investors, off-market listings offer several advantages over traditional channels:

• Reduced Competition | Fewer investors are aware of off-market listings, which translates into reduced competition and potentially better deal terms.
• Time Efficiency | With fewer bidders, the transaction process can be much quicker, allowing investors to lock in deals faster.
• Access to Unique Opportunities | Off-market listings often include properties that are unique in terms of location, features, or potential for return on investment.
• Negotiation Leeway | The absence of a bidding war often gives investors more room to negotiate deal terms that favor them.
• ‍Direct Listing Broker Contact | In most off-market transactions, investors work directly with the listing broker of record instead of through a buyer broker.

How to participate in the market for off-market listings

Traditionally participation in off-market listings has been limited to pre-existing relationships between listing brokers and owners. However, Buildout Connect, the off-marketplace, now makes it possible for any listing broker to connect with verified investors when new listings are recorded in Buildout, the system of record for just over 30% of CRE listings.

Buildout Connect employs a unique double-blind methodology for matching verified listings to verified investors without publishing identifying information about the listing or the matching investors. Upon recording their listing, and before the listing is published, brokers are notified that a number of investors are interested in properties matching their listing and have the option to be connected to the investors.

If you’re an investor and you’re interested in participating in Buildout Connect, the off-marketplace, you can register yourself and your investment criteria here.

If you’re a broker and you’re interested in learning more about participating, you can schedule a demo here.