A right of first refusal nearly ate my whole $60k assignment fee

9.56 in place going to a buyer at effectively 9.29 after your fee. What's the buyer's rollover schedule look like? Four tenants in 31,000 sf means if two roll in the same 18 months, the in place cap is a snapshot and the real question is the weighted average lease term. Also curious whether the $196k NOI had a management fee and a capex reserve in it or whether the estate was self managing for free. Every estate deal I've underwritten had a phantom 4% management line I had to add back in.

31,000 sf of 1980s flex means roof and pavement. Did the buyer price those or just take the inspection report and move on?

The ROFR timing is what I'd want to understand better. You sent notice day 18 with a 15 day clock inside a 45 day inspection and $25k going hard at day 30. So the waiver landed on day 30, the same day your money went hard. That's not margin, that's coincidence. Did you have a written agreement to extend the hard date if the ROFR clock ran long, or were you just going to eat the $25k?

How did you find the buyer for this, and how long had you known them before the contract? I'm building a list right now and I can't tell whether four tenants of industrial is a different buyer entirely from the people who tell me they want small multifamily.

Any excess land on the parcel? Flex buildings from that era often sit on more dirt than they need and the zoning sometimes allows another building. I've seen that be worth more than the improvements in a market with a logistics story, and if you didn't price it, your buyer might have.

What was your actual out of pocket before closing? $25k earnest obviously, but I'm trying to work out what a deal this size costs to chase if it dies. Legal, inspection, travel, whatever you spent on the estoppel process.

Here's what bothers me about the numbers. $2.05M to $2.11M is a 2.9% spread. Your $25k was hard for 15 days and your downside if the buyer walked was the full $25k plus costs. So you risked roughly $30k to make $60k on a deal where the ROFR alone could've zeroed you out through no fault of your own. That's a fine bet once. Is it a repeatable one, or did the fee just happen to be big enough this time because the building was?

@ledger the size is the point though. Same paperwork, same 45 days, same three phone calls a week, and the fee scales with the building. My team does service work not deals, but the labor math is identical, you can't afford the process on a small job and the big one pays for the whole month.

Who actually chased the amendments down, you or the attorney? I'm interested in the service side of this and "person who reconstructs a lease file for a commercial seller" sounds like a job somebody would pay for.

The bit I'd underline for myself is the third ask. You asked twice, got nothing, asked again and a bookkeeper found a folder. Most people stop at two.

Did you consider just buying it? $2.05M at a 9.56 with a real market underneath it sounds like something people would fund. I ask because I keep meeting operators who assign deals they could've kept, and I've never gotten a clean answer on why beyond not having the capital that week.

@meridian in my experience the answer is usually that the fee is certain and the hold isn't. I've kept two buildings I should've flipped and the third year is where you find out what the roof costs.

I want income and no second job, and the amount of work in those 45 days is a full job. Not a criticism, I just want to be clear with myself about what I'm reading.

The 2019 amendment is the interesting document, and I'd want to know its exact wording. ROFRs come in two flavors, a true right of first refusal that triggers on a bona fide third party offer, and a right of first offer where the seller has to shop it to the tenant before marketing at all. If it was the second kind, the estate may already have been in breach by listing it for seven months without notice, and a signed waiver cleans that up for the buyer going forward but doesn't necessarily clean it up between the tenant and the estate. How that plays out depends on the language and the state, which is an attorney question and it sounds like you had one. Did the waiver cover past conduct or only consent to this sale?

@anchor that's the sentence I'm writing down. Get the permission before anyone knows what it's worth.

Curious whether the end buyer was using a lender or paying cash, and if there was debt, did the lender have anything to say about your assignment fee sitting on the settlement statement? I've heard both that lenders don't care and that some size the loan off the original contract price. My guess is it comes down to the individual lender and you have to ask them in writing.

Working through my licensing coursework right now and this thread is more useful than the chapter on agency. One thing I'm chasing down with an attorney before I ever try this, whether assigning a commercial contract in my state triggers a licensing requirement at all. My instructor mentioned North Dakota's 2025 law extended wholesaling requirements to all real estate transactions rather than residential only, which surprised me, because I'd assumed commercial was outside all of that. Apparently not everywhere.

The estoppels in week one is the part I'm stealing, even for a fourplex.