Owner advisory
How should an owner evaluate an unsolicited offer?
An unsolicited offer may be worth pursuing, but the decision should be based on more than the headline price.
Start with value, but do not stop there
An unsolicited offer can be attractive because it appears to eliminate the time, expense, and uncertainty of going to market. The first question is whether the proposed price reasonably reflects the property’s current market value and its value to the buyer making the offer.
A credible review should consider current income, market rent, operating performance, capital needs, comparable transactions, financing conditions, development or repositioning potential, and the depth of the likely buyer universe. A single offer is evidence of one buyer’s interest. It is not, by itself, proof of market value.
Compare the complete offer
Two offers with the same headline price can produce very different outcomes. Owners should compare the economics and the probability of closing together.
- Earnest money and when it becomes nonrefundable
- Financing, appraisal, and other contingencies
- Length and scope of the due diligence period
- Assumption of known repairs or capital needs
- Closing timeline and extension rights
- Buyer experience, funding capacity, and decision authority
Understand what the buyer may know
A buyer who approaches directly may have a specific strategic reason for wanting the property. It may complement an existing portfolio, solve an expansion need, remove a competitor, or create value through redevelopment. That does not make the offer unfair, but it may mean the property has more strategic value than a simple comparison to recent sales would suggest.
Ownership should also determine whether the offer reflects information that is not yet fully incorporated into the owner’s own analysis, such as an upcoming infrastructure project, zoning change, tenant demand, or development plan nearby.
Test the alternatives before accepting
The choice is rarely limited to accepting or rejecting the offer. An owner may negotiate directly, request improved terms, quietly test interest with a focused group of buyers, conduct a broader process, refinance, hold, reposition, or delay a sale.
The appropriate response depends on confidentiality, timing, tax considerations, operating priorities, partnership dynamics, and the owner’s willingness to accept market exposure. A short, disciplined review can clarify these alternatives without committing the property to a public process.
A practical next step
Before signing a letter of intent, establish an independent view of value, identify the material terms that must improve, and determine what information the buyer should receive. The goal is not always to create an auction. It is to make sure ownership understands the decision, the tradeoffs, and the value being transferred.