The Exclusive Listing Myth

3 minutes ago
7 min read

Last month, a 26-story office tower in Manhattan's Financial District closed for $105 million. The building had traded nearly a decade earlier for $225 million, after which the sellers poured another $70 million into gut renovations. By any traditional calculation, they were staring at a catastrophic loss nearly $200 million evaporated into the New York skyline.

But here is what nobody wrote about: the deal didn’t happen through an exclusive listing. There was no glossy offering memorandum, no controlled auction, and no six-month “process.” The building at 101 Greenwich Street never hit a listing platform; it sold because someone reached the right buyer, the one person who looked at a distressed office tower and saw what others didn’t. The buyer, Idan Ofer, partnered with Nathan Berman of Metro Loft, who has converted more than 8 million square feet of office space into residential.

The deal closed because the right buyer was found, a fact that challenges how the commercial real estate industry has operated for decades.

The unstated truth about $100+ million transactions is that finding a buyer is not difficult. Manhattan is drowning in capital; sovereign wealth funds maintain permanent teams in Midtown, and family offices move with conviction. In 2023, foreign investors accounted for over 32% of New York City investment activity the highest level since 2019 with Manhattan attracting nearly 20% of all foreign capital flowing into U.S. commercial real estate.

Access is not the scarce resource. Assets are. So, if finding buyers isn’t the challenge, what is? Finding the right buyer.

The Cupid Problem - Think about what this actually means. One investor looks at a building and sees a nightmare: deferred maintenance, difficult tenants, a location that doesn’t fit their portfolio, or a capital structure that doesn’t pencil. They will lowball or walk away entirely. Another investor looks at the exact same building and sees gold. They see the bones of a residential conversion, the corner lot that makes an assemblage possible, or the ground lease that fits perfectly into their tax strategy. They see the neighborhood five years from now instead of today. The building didn’t change; the buyer’s vision did

This is why commercial real estate at the highest level isn’t really about “selling” at all. It’s about matchmaking. Call it the "Cupid problem": your job isn’t to convince someone to love what you’re selling. Your job is to find the person who already loves it.

The moment you find that match, the market speaks for itself regarding pricing. In Manhattan, at $100+ million and above, there is a beautiful and brutal reality that strips away the noise: nobody steals anything, and nobody overpays. The market speaks, but what the market says depends entirely on who is listening.

The Gatekeeper Incentive - Now bring this back to exclusive listings. If the whole game is finding the perfect match the one buyer who sees your building the way you need them to see it so what does an exclusive listing actually do? It restricts who gets to look.

Often, an exclusive broker may choose a buyer not because they are the strongest candidate or willing to pay the most, but because the broker can finance the deal internally or plans to resell it within their own network. These incentives can quietly shape the outcome.

This isn’t about running a "cattle call" or blasting every investor on earth with an offering memorandum that is the opposite of what sophisticated sellers need. It is about reach without noise, access without chaos, and discretion without restriction. It is about making sure that when the market speaks, everyone who should hear the question actually hears it.

The exclusive model doesn’t just fail to find the right buyer. It’s structurally designed to prevent finding the right buyer. That’s not a bug for the brokerages running exclusives it’s a feature.

Here is the part nobody in the industry wants to discuss openly: when a brokerage controls a listing exclusively, they control who sees it. They control the narrative, the timeline, and the flow of information. They determine which buyers get a seat at the table and which never know the opportunity exists. Crucially, when that same brokerage brings an internal buyer, they often earn double the compensation. Even without bad intent, that reality influences behavior. It influences how widely a deal is shown, how aggressively outside offers are pursued, and how competing bids are characterized to ownership.

Federal courts have begun to confront the structural tension embedded in dual agency. In JLL v. 1441 L (D.D.C., 2022), U.S. District Judge Florence Pan described dual representation as “inherently suspect,” citing the unavoidable conflict of interest when one firm represents both sides of a transaction.

Even within the brokerage community, cracks have appeared. Paul Massey, founder of B6 Real Estate Advisors and a partner at Massey Knakal, has publicly banned dual representation at his firm, stating: “It causes, at best, confusion and, at worst, direct-on conflict where one of the parties or more is left wondering who's representing them.” When major brokerages were recently asked to explain their policies on dual agency, they declined to comment. The silence tells its own story.

Off-Market vs. Off-Competition - Industry research indicates that buyers in limited-exposure transactions often achieve discounts of 15–20%. One prominent analyst described private listings as “setting real estate back 50 years, benefiting no one except the brokerages that implement them.

Academic research tells a consistent story: competitive processes generate price premiums between 3.6% and 9% compared to constrained or private sales. On a $200 million asset, even the conservative end of that range represents over $7 million in unrealized value.

Here is the distinction that matters most: off-market and off-competition are not the same thing.

Studies showing “off-market discounts” define off-market as limited exposure a seller showing their building to one buyer and negotiating a quick deal. That is not what sophisticated off-market looks like. Sophisticated off-market looks like 101 Greenwich Street: no public presence and total discretion, but every single buyer who might see value was given the chance to see it.

The exposure was complete; the marketing was nonexistent. That is the difference between off-market and off-competition. The best off-market deals still reach the full universe of qualified buyers. They happen through relationships direct connections to principals, family offices, institutions, and operators actively seeking specific asset types.

The information is curated. The participation is not. Discretion and competition are not opposites; they are complements. The goal isn’t to hide an asset; it’s to reach everyone who matters without alerting anyone who doesn’t.

The evidence isn’t theoretical. Look at the transactions:

6 East 43rd Street ($135M) - A Midtown tower acquired by The Vanbarton Group from the Milstein family’s Emigrant Savings Bank for office-to-residential conversion.
530 West 25^th Street ($72M) - A Chelsea office building housing a major art gallery, acquired by The Feil Organization.
131 Prince Street ($50M) - A retail co-op in SoHo, acquired by Acadia Realty Trust as a strategic acquisition.
Kew Gardens Portfolio ($46.5M) - A Queens multifamily portfolio of three buildings (433+ units), acquired by Benedict Realty Group.
236 5^th Avenue ($65M) - An office building where The Kaufman Organization structured a brand new 99-year ground lease.

Every one of these transactions happened off-market. There was no public marketing, no listing platforms, and no press until closing. Each achieved pricing that reflected the true market because the right buyers were found not merely the convenient ones through relationship-driven processes that prioritized real competition over manufactured scarcity.

The results speak for themselves. Properties exposed to genuine competition, even in a difficult office market, have consistently outperformed expectations. Buildings marketed with real buyer access have attracted multiple bids above asking price and closed at premium valuations.

Meanwhile, properties that cycled through controlled processes, endured withdrawn offerings, and fragmented exposure have suffered catastrophic value destruction. Buildings that once traded for $400 million or more have resold for fractions of those prices not because the real estate was flawed, but because price discovery was.

There is another dimension to the exclusive listing problem that receives even less attention: time. Exclusive listings typically take three times longer to close than relationship-driven off-market transactions three times longer to find a buyer, negotiate, and close. This means three times longer with capital tied up and carrying costs mounting in a market that might be moving against you. When an exclusive process takes eighteen months instead of six, the seller doesn’t just wait longer. They pay for that wait in hard dollars.

The commercial real estate industry is changing slowly, but unmistakably. Owners are asking harder questions. They are requesting data on how many buyers actually saw their opportunity. They are comparing outcomes to buildings that traded through different approaches, and they are sharing notes in ways they didn’t before.

The next generation of decision-makers grew up in a world of information transparency. They are instinctively skeptical of gatekeepers and understand that “exclusive” is often a synonym for “restricted.” They want to know the market actually spoke, not just a curated slice of it.

This doesn’t mean the end of discretion. The need for confidential transactions isn’t going anywhere; sellers will always need the ability to explore options without alerting tenants, competitors, or the press. But discretion doesn’t require restriction. The most successful transactions increasingly prove it is possible to reach everyone who matters while telling no one who doesn’t.

At the end of every major transaction, only one question matters: Did the right buyer see the building? If the answer is yes, the market spoke, and the price was what it should have been. The outcome was the best possible outcome. If the answer is no, or even “I’m not sure,” money was left on the table. Maybe a little, maybe a lot. You’ll never know.

The building at 101 Greenwich Street found its buyer. Not the most obvious buyer, and not the buyer who would have shown up at a controlled auction to bid what everyone else was bidding. It found the buyer who saw 614 apartments where others saw a distressed office building the buyer who saw gold.

That is what the right match looks like. That is what actually moves price. Not bidding wars, not artificial urgency, and not controlled processes designed to benefit the controllers. Just the right buyer in the room. Everything else is theater.