Off-Market Asset Disposition & Procurement Strategies

Arrivato works with principal owners [and their professional representatives] interested in executing a discreet and timely sale of an institutional quality asset or portfolio.

We have experienced the misconception that the traditional approach of listing an asset on the market and having it widely exposed to the masses will yield a bidding war to get the best price.  Sometimes that works, but often it does not.   The highest bid often does not make it the closing table.

Here’s why.

By going to market, we find that you eliminate many of the most qualified buyers who prefer to transact quietly without all the white noise working through the conventional channels.

Buyers who prefer to transact in this quiet manner are willing to be aggressive with their offers [of course, without overpaying] and simply prefer a simple, relationship-driven process to acquire an asset.

Here is an example of why executing in a quiet, relationship-based environment is the most productive method.

A long-time relationship of ours is a very powerful purchasing entity.   They made an aggressive offer just north of $150 million pursuant to acquiring an asset in which they believed was a very fair and aggressive offer.

Another professional suggested they could secure north of $160 million for the asset and recommended they go to the market.

With the recommendation they go to market, at least a few months passed and the original offer just north of $150 million made off-market was the best offer.   The broker representing the seller tried to approach our friend, but he was no longer interested since the optics of the transaction were now different.

It was a lost opportunity for the seller.

Here is the different approach we can offer.

Our firm has a significant number of long-time personal relationships with ultra-high net-worth private individuals and families, opportunity funds, pension funds, private equity firms, development firms, and REITS with strong liquidity positions and existing commercial real estate holdings that are actively seeking acquisition of assets in a quiet, off-market setting.

These groups depend on us to help them discreetly execute on transactions throughout the United States without making a ton of noise.

These well-capitalized partners are long-standing, established personal one-on-one relationships that are active in many sectors including multi-family (approved ground up developments and existing) apartments, hospitality, office buildings, industrial buildings, existing retail – single and multi-tenant net lease opportunities.

Most importantly, they know we have a sophisticated understanding of underwriting, due diligence, and overall aptitude with respect to investment opportunities.

Now here is what makes us different.

Yes, we know a lot of well-qualified purchasing entities.  In fact, we understand them so well that we do not need to blast an email to a list.

We know specifically which entities would be the most aligned to acquire a specific asset and can confidentially contact them in a more personal manner.   Most of the time, we know which one or two phone calls to place confidentially.

As previously stated, many of our purchasing relationships will not pursue acquisitions of properties that are widely marketed through national brokerage companies. These purchasing entities prefer to transact in an off-market setting free of competition and bidding processes.

This level of discreteness is important and paramount to the way that we do business with our long-term and long-standing partners.

Execution: Clients seek off market acquisition opportunities, and provide quick and efficient due-diligence and closing processes. Clients desire to execute acquisition with all-cash, and place debt on the asset post-closing. Debt assumption requirements will be considered on a case-by-case basis. We manage this process from start to finish with our partners.

The most important aspect to consider for our firm when engaging in an off market transaction is to create an open dialogue between the purchaser and seller.

It is also important that our firm has access to the information that a sophisticated purchasing entity is accustomed to receiving to complete their pre-LOI underwriting.

Arrivato will assist in setting up data rooms and collecting information as we perform our own analysis and house, as well, which is complementary to our clients and partners underwriting methodology.

Most importantly, this includes being presented a clear understanding of the current cap rate at the sellers’ asking price based on the assumed NOI, at the outset of the negotiation.

The purchasing entity will ultimately need to review the historical operating statements, Trailing 12 Months (TTM) cash flow, and itemized rent rolls that are up to date, and similar.  The aforementioned is mandatory in order for our buyer(s) to complete their underwriting, thereby, enabling our buyer(s) to submit a qualified, written offer to purchase (LOI, PSA, MOU, etc.).

With the above information and a properly priced asset, our firm can quietly identify the best aligned purchasing entity for an asset within a reasonably short time-frame in a very quiet, confidential, and timely manner.   This often means we only need to have a confidential discussion with only a few trusted relationships.

Our partners are not looking to undercut the market, as a general strategy.

This sincere approach towards completing transactions, as an end goal, ensures our interests are aligned from the very beginning.

Arrivato’s goals are to place our well capitalized partners in the most opportunistic setting that directly correlates to their investment objectives, delivering risk thresholds and appropriate returns on investment.

This strategy ensures our partners and clients can execute a reasonable number of transactions without over-exposure to the market.

Our clients’ off-market purchasing strategies include:

(1) Appropriately priced multi-family communities, single assets and portfolios (value-add and core acquisition strategies), nationwide, in major MSA’s and secondary markets.

(2) Single-tenant net-leased office, industrial, and retail properties leased to credit tenants on a NNN basis.

(3) Medical office buildings (MOB’s) that are of institutional size, located contiguous to existing hospitals, leased to quality medical tenants, and similar characteristics.

(4) Government Class A/B Leased Assets (GSA), municipal tenants, and rated public entities.

(5) Best-in-Class 4&5 star existing hospitality assets, quality hotel assets in most major MSAs that can be re-positioned.

(6) Large commercial office buildings and office towers that offer the ability to reposition the asset within the particular market as our partners bring a plethora of resources to each transaction in order to be successful.

(7) Major MSA’s: Identify opportunities that provide our purchasing entity the ability to convert existing structures to hotel, luxury condo and or multi-family rentals. Specific desire to identify properties in gateway cities: NYC, Los Angeles, San Francisco, Washington DC. Urban core locations in Atlanta, Denver, Seattle, San Diego will be of interest as well.

(8) Identify classic real estate development opportunities for apartments, condos, hospitality, office, in similar asset classes for the rare instances we take such risk. A select number of our investors and partners specialize in particular types of land development, assemblage plays, etc., for which, we help identify and do the preliminary underwriting for said deals. Our management team has significant experience in delivering residential lots, Class A office buildings, and mixed-use lifestyle centers, among other asset classes in commercial real estate.