We are looking at acquiring a medical office building in New York City. We would really like to acquire the property, but are also mindful of not overpaying for the asset. With that in mind, it would be helpful for us to have more of an understanding of the competition in the marketplace. How competitive is the bidding on commercial assets at the moment? Are there certain asset classes that are more competitive than others?
Answers
Brokers work hard to drum up interest in commercial properties. Some sales have many potential buyers engaging in multiple rounds of bids. I have seen the competition strongest in trophy buildings. The interest in industrial and medical office is strong now. Hotels are not so much and other
categories are varied. In order to really answer your question I would have to understand the product type, price range and market you are looking at. New York is somewhat less competitive than it has been, but that doesn't mean that
certain assets won't gather significant interest.
Very competitive in New York City. Unless there is widespread concern for a particular asset, there is a lot of money out there looking to invest in good assets in New York, and there is a scarcity of good properties for sale at sensible returns compared to investor demand.
There is a lot of competition at present for acquisitions due to the limited opportunities. Furthermore, equity investors requiring to deploy capital meet with their investors to return targets. If you view the opportunity is something that you wish to add to your portfolio and the economics (returns, IRR, etc.) make sense, maybe increasing your offering price would increase the seller's interest to sell to you.