What is an off-market transaction?
In the real estate industry, an off-market transaction refers to the trading of one or more properties in the form of a sale, which - in contrast to structured bidding procedures or marketing via intermediary platforms - takes place in the absence of the professional public. In this case, trading is based on the targeted approach of a small group of investors or exclusive bilateral negotiations with only one potential buyer by the seller himself or by a specialised off-market intermediary. In a non-formalized process, the procedure can be flexibly structured in terms of transaction volume, contract modalities and time frame according to the individual needs of the buyer and/or seller.
Reasons for off-market-transactions
The reasons and advantages of off-market transactions are, according to the study on off-market transactions carried out by Bulwiengesa, mainly in the discretion and quality of the matching. However, many market participants also recognise the higher probability of conclusion and the possibility of achieving higher sales prices as a major advantage of this transaction structure.
Almost 85% of the market participants surveyed are prepared to accept a price premium for the advantages of this transaction structure in off-market transactions. They also mention the flexibility that lies in freer contract modalities and more individual coordination.
According to the study, approximately 98% of all market participants have followed off-market transactions, which thus covers almost the entire circle of participants. In contrast, 70.9% participated in bidding procedures from the classic on-market area, which shows that 29.1% do not pursue or exclude this procedure. Thus, the off-market structure achieves a significantly higher market penetration than the structure of on-market deals.
Source of the graphics: Bulwiengesa, 2nd off-market study, October 2019
Off-market at the NIG Naumann Real Estate Group
With our many years of proven experience, we predominantly carry out off-market transactions throughout Germany. The NIG Naumann Immobiliengruppe always focuses on finding the "Best Buyer", i.e. the optimal buyer for the properties. Through our excellent network of decision-makers in real estate funds, project developers, insurance companies, pension funds, family offices and private investors, we always bring the seller together with highly qualified investors.
By selling off-market, we increase the processing security for both the buyer and the seller and usually achieve a higher purchase price than with on-market transactions. We see ourselves as a trustworthy partner of both buyer and seller in order to create the optimal framework for both sides.