So; I'm looking at expansion of a current business model and am looking around locally for vacant/underutilized commercial properties. I have a certain size in mind, and a certain geographic area. Most of the possibilities do not meet my size requirements unless I "bundle" multiple adjacent properties. What are some general strategies for approaching these situations? They are all off market properties.
For example; Three adjacent properties that might meet my needs, A, B, and C. "C" is small, but desirable purely because it has road frontage. "A" is the bulk of what I want, empty lot, easily developable. "B" just connects the two. "A" is brownfield owned by an out of town investor, "B" is a small underutilized strip mall-ish property owned by a local realtor. "C" is a large empty lot owned by a local family type operation; well established, connected, and owns a lot of similar property.
In this example, I am looking for basic strategies to approach all three parties and get the best deal, without tipping my hand that I need to have all three to make it work. Do I need to make a deal on all three, closing simultaneously? Non disclosure agreements? Suppressed sale? Would I want to utilize an out of area realtor? Third party intermediary?
This is an actual scenario, but I've identified several other opportunities that would require similar strategies.
Any input is appreciated.
You need to use options so that if you can't get all three you don't close the purchase of any. use a separate LLC as the purchasing entity for each different property, and I would use at least two different brokerage firms as go between.
You want to see if you can reach a satisfactory deal with the most difficult/least likely to consummate property first so as not to wast time with the others if you can make a deal with that one.
Also, you may want to put some time between your initial approaches to each owner so as to avoid the appearance of someone creating an assemblage.
A quicker, though potentially more expensive way to accomplish this is to tell all three owners you'd like to purchase their property, but only if all agree to sell. You then tell them that you will make a take it or leave it offer; if any of the three don't accept then you don't buy from any of them. In this scenario you'll have to make the initial offers attractive, since you get only one shot.
The thing about assembling different property, especially when there not for sale, is that its not a matter of getting the property under market price, since its most probable that at least one owner will have to be offered an above market price to convince him to sell. assemblers have often bent over backwards to accommodate reluctant sellers; often finding them new locations, paying their moving expenses, paying "bonuses" to decision making personnel (bribes), cutting sellers in for a share of any long term profits, etc.
If your plan can work with purchasing a property from a single owner, it would be much simpler.
on the other hand, purchasing a property from multiple owners can lead to an acquistion at a significant discount to market price, especially the buyer doesn't mind buying less than 100% interests, and has a longer term time horizon.