An Alternative to Traditional Small-Bay Industrial Acquisitions: Why and How to Pursue Off-Market Deals

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An Alternative to Traditional Small-Bay Industrial Acquisitions: Why and How to Pursue Off-Market Deals

Competition for small-bay industrial properties is heating up as demand for light industrial, flex space, and last-mile distribution facilities continues to grow. Public listings and brokered deals often trigger bidding wars, driving prices higher and eroding returns. One way savvy investors are getting ahead is by targeting off-market deals — properties bought and sold privately, without public advertising.

Off-market acquisitions can mean less competition, more favorable pricing, and direct owner negotiations. But they also require a strategic, proactive approach to find and secure.

 

In a recent interview with Cody Payne, one of the authors of Flex Space Domination: “Some of the best and lowest price per square foot deals I have seen trade were done off-market, when a seller doesn’t want to use a specialist and or doesn’t want to pay a real estate fee, they take an off-market deal. When this happens the buyer always has the upper hand, and the seller usually always leaves money on the table in some case millions of dollars.”

Understanding Off-Market Deals in Small-Bay Industrial Real Estate

Off-market transactions bypass public listing platforms like MLS, CoStar, or LoopNet. Instead, they happen through private discussions, direct outreach, and industry connections.

Owners may choose to sell off-market to:

  • Maintain privacy 
  • Reduce brokerage fees
  • Hopes of getting a deal done quickly

For investors, this approach can unlock opportunities that never make it to market — often high-quality properties held by long-term owners who prefer discretion.

Why Consider Off-Market Deals?

1. Reduced Competition & Better Terms
Without multiple buyers in play, negotiations are more direct and flexible — allowing for creative deal structures like seller financing, flexible closings, or leasebacks.

2. Access to Undervalued Assets
Many off-market opportunities involve older properties ripe for value-add upgrades — from modernizing infrastructure to restructuring leases for higher returns.

3. Faster Transactions
Without public marketing timelines, closings can be streamlined when buyers are prepared with financing and clear proposals.

Challenges of Off-Market Acquisitions

Finding Them – They aren’t advertised, so sourcing relies on relationships, research, and outreach.
Owner Willingness – Many won’t sell unless offered compelling terms.
Due Diligence – With less upfront information, buyers must thoroughly verify property condition, leases, and compliance issues.

How to Find and Secure Off-Market Deals

1. Build Industry Relationships
Brokers, property managers, and developers often know of assets available quietly.

2. Leverage Market Data

  • Target long-term owners via property tax records
  • Track lease expirations and upcoming vacancies
  • Monitor distressed properties (tax delinquency, code violations, deferred maintenance)

3. Use Direct Outreach
Personalized letters, calls, or in-person visits can open doors. Consistent follow-up is essential.

4. Work With Off-Market Specialists
Some firms focus exclusively on these transactions, providing curated opportunities for a fee.

5. Be Ready to Act
Pre-arranged financing and a trusted due diligence team signal to owners that you can move quickly and close without hassle.

Podcast Resource: A Deeper Dive on Off-Market Strategies

For those looking to explore this topic in even greater detail, the Invest in Flex Space Podcast with Cody Payne has an excellent episode dedicated to sourcing, negotiating, and closing off-market deals. It covers real-world examples, actionable tactics, and the nuances of building relationships that lead to these exclusive opportunities.

Final Thoughts

Off-market acquisitions offer investors a way to sidestep intense competition, negotiate favorable terms, and secure high-value assets that often fly under the radar. Success comes from persistence, networking, and preparation.

 

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