Doing the Deal: Give Buyers, Sellers Their Due

NEW YORK CITY-For brokers in the net lease sector, getting the deal done means simultaneously managing the pricing expectations of sellers and bringing the right buyer to the table. That's no easy task when, as Jason Maier, locally based director with Stan Johnson Co., puts it, “I haven't met a seller that didn't want to set the Guinness World Record for lowest cap rate.”

Maier says the trick there is not so much curtailing that ambition as making clear what the property's reconciled market value is. That means taking a good look at the asset and providing the sellers with as much information as is feasible. Or, as John Glass, SVP investments with Marcus & Millichap Real Estate Investment Services, tells his clients, “Don't listen to a word I say. Look at the market data.” He also advocates being “100% honest” with them.

Keeping the seller in the loop is also key to building and maintaining relationships, brokers say. “Communicate, communicate and keep communicating” is how Maurice Nieman, SVP investment sales at Colliers International, sums up the process, while Glass says “It's about being a resource for clients.” For Andrew Fallon, assistant VP with Calkain Cos., “It comes down to results.”

And for brokers, getting the results, he says, mean making sure the right buyer is on the other side of the table when the deal closes. That begins with vetting. “You can't be afraid to ask the difficult questions,” Maier says, nor be hesitant about making would-be purchasers jump through hoops to prove their legitimacy.

That degree of discretion is easier to maintain given that for net lease properties, it's a seller's market, says Glass. One practice that's coming back into prevalence, he says, is having the prospective buyer make a representation of warranty; Glass says he hasn't seen this deployed so frequently since the previous market peak in 2007.

Another technique for ferreting out the contenders from the pretenders is looking at would-be buyers' willingness to use the lenders that the brokers and their clients have earmarked. The bottom line, says Guy Ponticello, managing director with Jones Lang LaSalle: “It's all about getting information” on potential buyers.