Sometimes making the sale is all about being willing to do enough digging. That was certainly the case for an Ottawa property that Mackenzie Investments had had trouble selling in the past.
The 66,000-square-foot industrial facility was previously packaged in a larger portfolio with a different broker but was discarded because it was something the buyers didn’t want to take on, explains Mackenzie assistant vice-president Andrei Novak.
What should have been an easy sell thanks to the demand for industrial property was made difficult due to environmental challenges that had lenders balking, adds Graeme Webster, who runs Koble Commercial Real Estate & Brokerage with business partner Marc Morin.
“I had a couple brokers trying to kick the tires and bring different players to the table with unrealistic demands,” says Andrei. “when Koble’s team came in, they spent time to understand what the property’s issues meant. They spent their own time, not getting paid, to understand and get themselves educated. They dug really, really deep before they produced advice for me.”
Graeme Webster - Partner at KOBLE Commercial Real Estate Inc.
Their advice and strategy led to strong offers from multiple buyers on a property that had proven to be a challenge for Mackenzie.
But before that could happen, a lot of preparatory work was required, starting with Andrei. When the asset was discarded from the earlier portfolio, he needed to bring in consultants to assess its condition, a process that took several months. Graeme and Marc, who reached out to Andrei about taking on the sale (while the consultants’ environmental reports were in the works), were patient, staying in touch with Andrei throughout.
Once the reports were done, the Koble team dug in, taking a deep dive into them to thoroughly understand the complex and technical details. Their research, which took about two months, included multiple calls with each of the report’s authors — some of whom had conflicting conclusions — and even gathering them in meetings together to reach a consensus.
All of that research allowed Koble to become experts on the issue, which would serve them well when it came time to approach prospective buyers.
“Not a lot of brokers are either capable or willing to do that,” notes Andrei.
Also helping to overcome buyer objections was Koble’s wise move to help lenders truly understand the value of the property.
“We approached several lenders to discuss the report findings and explain in detail what the implications were and, in doing so, some of the lenders agreed to approve a loan on the property,” says Graeme. “When needed, we will go so far as to get an environmental report writer and the lender at the same table to have a real conversation to fully understand the issues.”
With all their preparatory work done, rather than take the property to the market in general and risk deal fatigue on a site that had already been on the market previously, Koble advised a strategy of an invited tender process, using a narrow approach to identify a select group of buyers, Graeme says.
Leaning on its experience and knowledge of who’s active in the local market as well as who would have the wherewithal to take on the considerable challenges, Koble approached a selected list of 10 of the best buyers for this type of property, walked them through all the details, helped them interview the environmental consultants, worked with their lenders “and brought in three or four bids on a property that hadn’t seen any in the past,” he says.
This case is a prime example of how embracing a challenge in order to best determine how to position it and sell it and to whom, goes a long way toward a successful outcome, says Graeme — but only if you take the time to really dig into it.
“We really did take the time to understand every aspect that could become an obstacle and, to a degree, we solved it ahead of time, invited in the right buyers and then executed on the plan.”
Andrei doesn’t think it’s an approach a larger national brokerage would have taken with a comparatively small asset.
“Larger firms may adjust the level of service they provide for that volume of a deal, whereas with Koble, the size of the deal didn’t matter, the level of service is still the same, the level of focus on doing what needs to be done and providing advice to me as a client was still top-notch.”
“We’ve done multiple deals with Koble and the size of the deal didn’t matter, the level of service is still the same, the level of focus on doing what needs to be done and providing advice to me as a client was still top-notch."- Andrei Novak, Assistant Vice President at Mackenzie Investments
This is the second successful transaction that Mackenzie Investments and Koble have worked on together and he wouldn’t hesitate to hire them again.