Prague apartment buildings: direct purchase or off-market sale?

Who is on the other side?

A company offering to buy your building is the buyer. That is not a criticism: many are reputable investors with their own capital and strong track records. But it is important to understand their role: their job is to buy on terms that make the investment work for their investors. The lower the purchase price, the higher their return.

The seller’s representative has the opposite role. They are contractually bound to act in the owner’s interests, and their success depends on how well the building sells.

What does “85% of the price now” mean?

Claims such as “we’ll pay you 85% of market value immediately” assume that the buyer determines the market value. A percentage of a figure set by the other party is not a benchmark. Without an independent valuation and comparisons with other investors, the owner does not know the basis of the calculation.

The difference can be substantial. For a building worth CZK 150 million, every 5% represents CZK seven and a half million.

When does a direct purchase make sense?

A direct sale to a single investor may be the right choice if:

• you need to sell within a very short timeframe (for example, because of debt or probate proceedings),
• the building has significant structural, technical or legal issues that would deter most investors,
• simplicity is your main priority and you are comfortable accepting one buyer’s price,
• you already have an independent valuation and the offer is in line with it.

“I need the money quickly”: why even an immediate purchase is not immediate

An owner who approaches a direct-buying company usually has a good reason: an inheritance and the need to buy out siblings, a loan falling due, fatigue from managing the building, or simply a desire for peace of mind. That need should be taken seriously, which is precisely why it helps to understand how a direct purchase actually works.

No reputable buyer will transfer tens or hundreds of millions without due diligence. A direct buyer will also check the Land Register, charges over the property, tenancy agreements, tenants’ payments and the building’s condition, and will need internal approval and contracts with escrow arrangements. The period from first contact to funds being placed in escrow is therefore usually measured in weeks, not hours.

Within the same timeframe, a managed sale can approach several vetted investors with their own capital simultaneously, including those offering a direct purchase. The owner’s deadline becomes a firm condition of the competitive process, rather than a weakness that a sole buyer can exploit in price negotiations.

How a managed competitive sale works

In a managed off-market sale, the owner’s representative approaches a pre-approved group of investors, typically developers, investment funds, family offices and private investors. These often include the same companies that offer direct purchases. The difference is that they are no longer buying on terms they have set themselves, but competing with others.

The process has defined timeframes: a teaser, an NDA, access to documentation, indicative offers, viewings and binding offers. Within a few weeks, the owner gains a realistic picture of what the building is worth to different types of buyer.

How to compare the two routes

The most sensible approach is not “either/or”. If you have a direct purchase offer, have it assessed. Establish the building’s income-based value, how many investors might be interested and what timeframe a managed sale would require. Only then should you decide.

Sometimes the direct purchase offer proves to be fair. More often, it provides a useful starting point for a competitive process.

Frequently asked questions