In this series, we’re looking at Third Party Acquisitions (TPA) as a standout discipline within the real estate market. We recently covered why this field is so important; from new technologies and data analysis to outsourcing specific tasks, some changes were clearly long overdue. This time, let’s step back and look at the big picture. The concept of TPA is already giving rise to new business models and a new breed of real estate company and professional.
Here at Offerd, we’re bringing this dynamic model to life. And for dealmakers in every function of the real estate market, this is great news.
Consider the traditional structure for real estate acquisitions, which mandates strict boundaries. Inside an investment firm, all activities are tied to one strategy, or a limited set of strategies, at one time. Acquisition professionals scour the country for assets that suit that particular strategy; any other properties that come up on the radar get discarded. Finance professionals engage in negotiations only for those properties, and put together the funds needed for only those deals. It’s all (or mostly) done in-house, regardless of inefficiencies, and every participant is involved in only one part of the deal, and only for part of the time.
Perhaps worse of all, the tight boundaries apply to income—earnings are capped for all professionals.
Our Third Party Acquisitions model drastically changes all this. It removes traditional boundaries and gives talented professionals at every level the freedom to get more scope and reach, offer more valuable services enhanced by data and technology, and ultimately do more deals.
I should know: I spent 13 years as a VP of Acquisitions for a large family office. I loved it—flying across 30 plus states, shaking hands, touring and immersing myself in markets, enjoying great food and wine, what’s not to love? Well, I was always waiting for deal flow, and chafing at the missed opportunities and capped compensation. I couldn’t argue with a straight face that it was efficient. But there wasn’t anything better.
There is now. At Offerd, we’re not looking at one deal for one investor—at any given time, we track 90,000 off-market assets and 10,000-plus data points at the national, market, sub-market, and property levels on a unique acquisition platform. We maintain ongoing relationships with property owners and sell-side brokers around the country. We blend market research, domain expertise, innovative data analysis, hard negotiating prowess and far-flung connections on a unique acquisition platform.
We then work intimately with many best in class owners/operators/acquirers of multifamily, as an extension and enhancement to their acquisitions department, all focused on acquiring great assets. We help develop the strategies, create highly customized target lists of relevant assets to suit specific parameters, source dealflow, get knee-deep in negotiations, and stay involved long after the deal is done. Best of all, there’s a consistent source of income through retainers and uncapped earnings potential through fees for sourcing and closing.
Like me in the old days, there are many skilled real estate professionals eager to branch out. This new model is liberating, rewarding and the way of the future.