People ask me how I find deals more than almost anything else. The honest answer is less exotic than most people expect.
The platforms
Most of my deal flow comes from two platforms: LoopNet and Crexi. These are the primary commercial real estate listing sites. I have saved searches on both set up with my criteria (industrial, specific regions, price range) and I get email alerts when new listings hit. Most of them I can dismiss in 30 seconds. Every few weeks something comes up that's worth a closer look.
Spending time on these platforms even when you're not ready to buy is genuinely useful. You start to develop a feel for what things are priced at, what $/sqft looks like in different markets, what's been sitting forever vs. what moves fast. That market intuition is hard to get any other way. It’s very similar to how you might spend time on Zillow or Redfin when looking at houses and honing in on what things sell for in certain neighborhoods and how certain amenities, location and other things factor into the price.
Broker relationships
Over time I've built relationships with a few commercial brokers who specialize in industrial in my target markets. Once a broker knows what you're looking for and believes you can close, they'll bring you deals before they hit the public listings. That matters because the best-priced deals don't sit around.
Building these relationships takes time. The way I did it: I reached out cold, told them I was a buyer looking for value-add industrial in their market, and asked if they'd be willing to walk me through what they were seeing. Most brokers are happy to talk to a motivated buyer. Over several conversations across a few months, you start to become a real person to them rather than a random inquiry. You’ll probably notice the same faces showing up on listings in a particular market so reaching out to a handful of the brokers that are active in the market you’re pursuing is a good place to start.
What I'm looking for before I run a single number
Before I even open a spreadsheet, I'm asking a few quick questions about a listing:
Does the building fit the uses of my tenants? I typically prefer multi-tenant buildings with unit sizes between 1000 and 5000 square feet each. In this range there is typically a bigger pool of potential tenants and a wider range of potential uses compared to bigger spaces.
Is there an obvious value-add path? Vacant, mismanaged, below-market rents. Any one of these is interesting. All three is exciting.
Does the ownership profile fit? Buildings held by the same family for decades, second-generation ownership that wants to sell, deferred maintenance that signals a disengaged owner. These are the sellers most likely to be flexible on price and terms.
Is the market big enough? I look for a surrounding population of at least 25,000. Below that you risk a thin tenant pool and not enough transaction history to know what market rents actually are.
If a listing passes those filters, I'll run it through my quick screen. If it looks interesting there, I'll build a full back-of-envelope model to see what kind of offer makes sense to move forward with. The templates for both of those are in the playbook
Next issue I'll walk through a real deal analysis.
— Javi