WATER COOLER TALK: Sellers Beware of the Pocket Listing

All too often in the Investment Sales business, we hear about national brokerage groups being awarded listings for assets after a competitive BOV process where several firms compete for a listing. The market then patiently waits to see the marketing material on that asset flood the market in the weeks to come. More times than not, that material is never seen at all and it is as if the asset has gone into the dreaded Black Hole of Investment Sales. When pressed on why the deal is not more widely marketed, some of those groups would say that they are able to get their deals done by using only their internal database of buyers. While this may have been doable during the pre-recession feeding frenzy of 2006–2007, it is no longer the case in today’s market. More times than not, today’s deals are tough, and the difference between 10-15 basis points in sales price is everything to a Seller. The more prospects who are able to underwrite and bid on a deal, the higher the sales price you will ultimately realize.

Let this serve as a Public Service Announcement to the national brokerage firms who specialize in the dreaded “Pocket Listing”: Get your listing out there! Be willing to co-operate with other brokers in the best interest of your client. Sellers beware, if your brokerage firm is not willing to broadly market your deal, are they really working for your best interest or for their own?