| Primary motivation |
Occupy the building for their own business operations |
Generate rental income and build equity |
| How they value the building |
Based on rent savings, occupancy certainty, and capital cost — not yield |
Based on cap rate: net operating income divided by purchase price |
| Does vacancy help or hurt? |
Helps — they want to move in immediately |
Hurts — no income until a tenant is found and a lease is signed |
| Financing approach |
Often SBA 504 loan, conventional commercial mortgage, or all-cash |
Commercial mortgage sized to the building's income; DSCR must be met |
| Typical building size preference |
Under 100,000 SF; often 5,000–30,000 SF range |
Any size; larger buildings typically attract institutional investors |
| Most common buyer types |
Retailers (20%+), educational institutions (~20%), corporations, nonprofits, religious groups, healthcare providers, and foreign governments |
Private investors, family offices, REITs, and institutional buyers |
| Timeline sensitivity |
Often urgent — driven by lease expiration or business growth needs |
Patient — will wait for the right yield and right tenant mix |
| Due diligence focus |
Physical condition, zoning, certificate of occupancy, ADA compliance |
Lease abstracts, rent roll, tenant creditworthiness, lease expirations |
| Will they pay more than an investor? |
Yes — across 1,023 Manhattan sales over 40 years, user buyers paid an average of 16% above what investors were willing to pay |
Capped by cap rate math — will not pay a price that produces an unacceptable yield |
