Looking for advice on connecting with buyers who will pay for stabilized assets
Hi everyone. While looking for new opportunities as a broker, I made connections with investors with a few off market properties (around 50 and 100 units each in Jersey City) that are fully stabilized, or close to it, either new construction or fully renovated. They’re holding for time being unless they can sell it between a 4% and 5% cap. One of them is in an opportunity zone and has 7 years left of 10. The cap value based of NOI for property 1 is around $24M, and for 2 it’s $63M.

Clearly this is not a “deal” by any stretch of the imagination, and is meant for an investor who is looking for a very stable asset that will have relatively low capex in near term given the condition or building. I expect to continue running into this situation as there is a lot of new construction here and anyone would cash out at the right price.

My question is - what advice do you have for finding a buyer? What types (or specific) companies or funds look for these kinds of assets, and what is the best way to contact them (e.g. call and ask for acquisition manager)? Also, the same questions for smaller assets too ($1-$10M). 

Based on what I know, I don’t intend on spending a lot of time shopping these deals as I know they aren’t attractive investments for most. But there may be a niche out there that buys these properties to park cash long term. At worst I figured I’d make good connections for the future. If it’s unrealistic anyone buys these, that is good to know too.

Thank you in advance for any feedback.
[{"id": "gwso5ac", "text": "Are these only multi family? Why are you shopping them? Vs a broker?\n\nI\u2019d buy industrial at 5 cap under $10m", "replies": [{"id": "gwsp0qy", "text": "Mixed use. They have retail ground level.\n\nI\u2019m not sure what you mean by your second question. They want to keep it off the market. I\u2019m a licensed broker, so I would be hypothetically representing buyer and seller if I found the right buyer.\n\nAlso- are you saying you buy industrial in my area at that price, or are you just giving an example of you being willing to overpay?", "replies": [{"id": "gwspcs0", "text": "That\u2019s a salty ass comment for someone who didn\u2019t deserve it.\n\nIndustrial is proving almost as stable as multi family without any of the tenant protections -", "replies": [{"id": "gwsy8ac", "text": "What are you talking about? How was I salty? All i did was answer his questions as I understood them, and asked him to clarify", "replies": [{"id": "gwt4x6b", "text": "\u201cOr are you just giving an example of you being willing to overpay\u201d", "replies": [{"id": "gwtcgji", "text": "My question was asking for advice finding investors that are willing to buy lower cap deals. That person commented that they buy industrial deals at 5% cap. \n\nI asked whether they 1) were stating they\u2019d buy something I had if it was a 5% cap industrial, or 2) if they were essentially answering \u201cyes people are willing to buy deals at a lower cap, because i do it myself\u201d - AKA giving me an example of someone willing to pay a premium for a deal that fits their criteria.\n\nOtherwise, how else would their response that they pay 5% cap on industrial be relevant to my question? how else was I supposed to interpret what they were saying based on my question?\n\nEdit: I think the confusion is that you interpreted my comment as me saying they are overpaying. I\u2019m sure I could\u2019ve been more clear but I didn\u2019t anticipate someone interpreting as such. I was only trying to clarify that that is what they were saying - that they were providing an example. I wasn\u2019t telling them they overpay at a 5% cap", "replies": [], "depth": 6}], "depth": 5}], "depth": 4}], "depth": 3}, {"id": "gwsv3n4", "text": "Ah. I don\u2019t know your area but there are credit tenants deserving of a 5 cap in industrial. \n\nI\u2019ll choose not to be insulted about overpaying. Good luck!", "replies": [{"id": "gwt0l24", "text": "Sounds good that makes sense. In no way was I trying to offend you, as it seems from someone elses comments my response may have been insulting. I read your comment as if you were saying something like \u201cUnder the right circumstances I would be willing to pay for a lower cap industrial land vs other asset types because it\u2019s my preferred investment vehicle\u201d. As in you were giving an example that people do indeed pay premiums for assets if its theyre preferred type or for whatever reason", "replies": [], "depth": 4}], "depth": 3}], "depth": 2}, {"id": "gwsp39h", "text": "Specific market?", "replies": [{"id": "gwsuri7", "text": "We like Texas. Sun belt states. Prefer enough critical mass if it\u2019s something new.", "replies": [{"id": "gwt4k8w", "text": "Have some Frito-Lay warehouse space we might be unloading soon - South Oklahoma - occupied for 20+ years.", "replies": [{"id": "gwt5hg1", "text": "Sent you a PM", "replies": [], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "gwsol2q", "text": "I have a few debt clients who buy these types of properties with 1031 money feel free to PM me", "replies": [{"id": "gwsp724", "text": "Thank you. I will be in touch later on today when it\u2019s a better time for me.", "replies": [], "depth": 2}], "depth": 1}, {"id": "gwsphce", "text": "Create two databases. One for institutional investors (REITS, funds, insurance, etc.) and one for \"mom and pop\" HNI's. Pull every transaction that falls into your product focus in your preferred geography over the last 5 years and find out who was on each side. Insert them into the appropriate database. Once you have the databases built out, set up however many days per week (minimum one, should be two or more) and cold call every fucking one. Tell them exactly what you are doing; compiling a database for distributions of deals and inquire as to what their acquisition criteria is - get the needed info. I don't recommend asking for a meeting or even pitching a listing in your call unless it falls exactly into their wheelhouse or there is obvious interest in meeting with you. Work your ass off on this and get it done as quick as possible. Then setup an alert for future transactions, update database accordingly. Segregate the database into distro and call lists so that when you list something, you know exactly which part of your database to call on. Lot of work but at the end this isn't a question you will ever need to ask again. Eventually your goal should be to reach an income level/team size that you have a full time data compiler who accurately keeps this updated.", "replies": [{"id": "gwsysbe", "text": "Thank you this is super helpful. Are you pulling the data from costar or loopnet? If not, what sources are you pulling from?", "replies": [{"id": "gwt0fi4", "text": "Try real capital analytics", "replies": [], "depth": 3}, {"id": "gwt249j", "text": "Deed records. Then use various databases to find out who the real owners are and get contact info.", "replies": [{"id": "gwt2mrj", "text": "Ok got it. Thank you!", "replies": [{"id": "gwu0iw3", "text": "Listsource(corelogic) has some solid data from my experience", "replies": [], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "gwt340e", "text": "My understanding for opportunity zones is that the same amount has to go into improvements that goes into the purchase. The upside on a stabilized asset like you describe is not there for a buyer to take advantage of the opportunity zone benefits. If the seller bought them as opportunity zone investments, then won't they want to hold for the full 10 years to get the full tax benefit?", "replies": [{"id": "gwtvs9y", "text": "There is small loop hole to this:\n\nOZ Funds can acquire new construction assets pre-TCO. Stabilizing the asset satisfies the improvement requirement. Currently working on shopping our mixed-use OZ project to such buyers.", "replies": [], "depth": 2}, {"id": "gwv5rph", "text": "This is the question I was looking for. You cannot 1031 out of a QOF so you either hold for 10 or you're paying the tax. Also they have not made it long enough to reduce the deferred capital gains that were initially invested. If they have \"substantially improved\" the asset it would make no sense to sell now. Perhaps they ran out of time and did not sufficiently improve it (regardless of stabilization/lease up) in the eyes of their accountant, so they might as well sell?", "replies": [], "depth": 2}], "depth": 1}, {"id": "gwue8ly", "text": "There is no shortcut.  You basically have to make thousands of phone calls to multi family investors and see who has a 1031 or is just dying to buy in Jersey city. Hopefully in the process of calling all these investors, other leads will come.  Good luck.", "replies": [{"id": "gwuikcm", "text": "Thank you for your advice! Not looking for a short cut but a push in the right direction.", "replies": [], "depth": 2}], "depth": 1}]