To win a competitive auction for a 100% occupied shopping center located opposite a dominant five department store regional mall. Bierbrier was faced with ten bidders ranging from NYSE REITS to private institutional capital funds for this superbly located 45,000 sf strip center. Bierbrier needed to not only offer the highest price but also needed to overcome questions about the certainty of execution typically raised when sellers deal with a local non-institutional bidder.
Bierbrier was comfortable offering the highest price to win the auction because of superior local market knowledge, based on its portfolio activity in the market over decades which enabled Bierbrier to identify future demand and allowed for more aggressive underwriting. All due diligence, including third party reports, was completed during the offering period so the credibility of the high offer could be enhanced by a “hard money” bid without contingencies, cementing certainty of execution. The competing institutional bidders could not counter this strategy because their fiduciary responsibility to their investors required an extensive due diligence contingency. This did not constrain Bierbrier’s bid because the entire equity portion was generated internally. The greater risk was in making this ‘hard money’ bid without a financing commitment secured in advance. Bierbrier took this calculated risk because of his confidence in the exceptional quality of the real estate, a keen understanding of the financial markets and underwriting criteria and an unblemished reputation as a borrower, based on 40 years of successful banking relationships.