Generating Multiple Offers for Office Assets

July 20, 2023   Business, News, Sold Listings
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Selling office assets is a challenge in today’s market but, when executed effectively, it can be done successfully. Such was the case for a recent transaction on behalf of Crown Realty Partners.

The commercial investment and management firm had four sections of their portfolio they decided to sell in July 2022, awarding each section to separate brokerages. A nine-building portfolio totalling 71,000 square feet on Camelot Drive was awarded to Koble Commercial Real Estate & Brokerage.

The problem though, was a shifting market in which interest rates were rising, demand for investment commercial real estate was low, “and more specifically, office was a tough asset class to sell with the state of work from home in flux,” says Koble partner and broker Graeme Webster.

On top of that, one of the larger buildings in the portfolio was vacant, which presented a challenge, and Koble would be going to market at the same time as the three other parts of the portfolio, flooding the market with similar properties and creating an oversupply of product.

“We brought them to market in the fall of last year when conditions were still evolving and interest rates were rising rapidly and people were concerned about what was going to happen,” notes Scott Watson, Crown Realty Partners managing partner, leasing and acquisitions.

To combat the challenges, Koble executed detailed due diligence and analysis, recommending that the buildings be sold as a package to appeal to more buyers who were active, and that the vacant building be leased (there was an existing tenant interested in expanding into the space). Koble then created a thorough marketing strategy to have both broad coverage and to reach the most active buyers that the brokerage had experience with, Webster says.

“We called every active group on the list and made sure they understood the opportunity. The ultimate buyer had not been active in purchasing in Ottawa for years, which is evidence of how we really spread out and attacked the local buyer group in Ottawa.”

Graeme Webster - Partner at KOBLE Commercial Real Estate Inc.

Koble has unmatched local relationships and an exclusive list of Ottawa buyers that numbers more than 2,000 in their database — something others do not have access to. “From that we had enough interest to create a competitive situation in a tough market,” Webster says.

Matthieu Urbain, who is director of acquisitions at Crown Realty Partners, points to that connection to the local buyer community as a key differentiator. “Their reach across the market is very wide and they have access to lots of different buyer pools, so they were able to cast quite a wide net. That’s where they brought a lot of value to the table, in a market where the pool of buyers is thinner and thinner.”

As the process unfolded, Urbain says it became clear that Koble’s “relationships with the local market, which included the buyer, were very entrenched and went a long way. They were real and it was a much more personal approach to the deal execution, and I think that helped.”

Koble’s due diligence continued once potential buyers were identified to ensure the chosen buyer was qualified and would be able to move forward with the transaction. That due diligence included maintaining constant contact to confirm they were meeting timelines and removing hurdles throughout the process.

The communication was just as constant with the vendor.

“Throughout the whole process, Koble was on the calls, they were in the middle of discussions, they were managing expectations very well from both sides,” says Watson. “They communicated well, they kept on top of the deal. When the agreement of purchase and sale was signed, they didn’t run for the hills, they were active in getting across the line for sure. As a vendor, that was very much appreciated. Sometimes we have the opposite experience where an APS is signed and then the agents are nowhere to be found.”

Going to market in mid-October, sold by Christmas, for a favourable price, “which a great result for the client especially in this market,” notes Webster.

Urbain says that not only will his company work with Koble again, “We’re actively working on some other strategies with them right now.” And while Koble wasn’t necessarily top of the list for Crown before this successful transaction, “I’d say they’re probably top of the list now, or right up there.”

“A lot of times, institutional owners discount whether local shops and local brokerages can provide the same level of service and actively trade, and tend to lean on the bigger firms. Koble can definitely compete with the bigger firms."

- Scott Watson, Crown Realty Partners managing partner, leasing and acquisitions

Watson continued “Different investors should be open to having them in the room because they can provide the same service and same execution as they did for us. I think that’s a huge part of being a local, smaller service provider, that you get stuck in the ‘we’re just going to go with the big ones first.’ I think they did a great job.”

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