Portfolio Sales go the way of the Dodo

This is a NYC based article however I feel the point applies to all markets.

“Remember the portfolio deal? That’s right, the practice of grouping a bunch of buildings together and selling them all at once? Yep, it’s hard to remember, because the last time a big portfolio deal happened in New York City was …”

See Full Article Here

Of course there are some great props given to Massey Knakal  in the article as well…

Examples: Right now, Massey Knakal, which had made a sizable niche for itself in bite-size deals, is marketing a 17-building portfolio belonging to Westbrook Partners. But, key point here: It’s marketing the 17 buildings not as a portfolio but as individual assets. This is the East Village portfolio that Westbrook Partners bought from Extell in 2007 for $97.5 million.

Massey Knakal is also selling portions of a 46-building portfolio belonging toPraedium. Sources say CB Richard Ellis was originally enlisted to market the portfolio as, well, a portfolio. But then Lehman blew up and the would-be buyer walked away. Praedium and CBRE agreed there was no longer a portfolio market, and CBRE suggested Praedium go to Massey Knakal.

“The reason why the properties are being sold separately in all cases today is because financing is readily available today for small to mid-size properties,” Mr. Knakal said. “Up to $30 million, you can get money from community and regional banks who are still putting a lot of debt into the marketplace. And, because of that, we’ve seen a significant shift in the buyer profile, where the buyer has gone from a local operator with institutional capital behind him to a high-net-worth individual or families that have been investing for decades and they’re investing all their own equity.”

I think the point here is that the market for mid-sized properties is still alive.  The firms who specifically  handle properties above the $500mm mark  were able to play with these properties as portfolios back in the day(one year ago…) they no longer can.  They now look to Massey Knakal who has territory focus which enables our ability to  execute  these mid-market transactions.

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Filed under Finance, Real Estate Market

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