Seller Strategy
Think Like a Buyer: How the Right Buyer Perspective Determines Your Sale Price
A 1031 exchange buyer, an owner-user, an investor, and a developer all look at the same building and see a completely different number. If you don’t know which buyer type will pay the most — and why — you’ll price it wrong before you even go to market.
After 19 years and 1,000+ commercial property transactions in Greater Boston and New Hampshire, the single most important thing I know is this: the price your building commands is determined before it goes to market — not after.
The owners who get the best prices are not the ones with the best buildings. They’re the ones who understood, before listing, exactly which buyer type would pay the most for their specific asset — and positioned the property accordingly.
The Four Buyer Types — and How Each Values Your Building
Every commercial property in Greater Boston attracts a different mix of buyer types depending on its location, size, lease structure, zoning, and condition. Understanding how each type values your building is the foundation of a successful sale strategy.
1031 Exchange Buyer
A 1031 exchange buyer is reinvesting proceeds from a recent sale and must close within a strict 180-day window. They are often willing to pay a premium for the right asset because the alternative — paying capital gains tax — is more expensive than overpaying slightly for a replacement property. They value lease quality, income stability, and speed to close above all else.
Owner-User
An owner-user is buying the building to occupy it for their own business. They value the building based on what it costs them to lease comparable space — not on the income the building generates. This means an owner-user will often pay more for a vacant building than an investor would, because they’re replacing a lease obligation, not buying an income stream. They value location, functionality, and zoning flexibility.
Investment Buyer
An investment buyer is acquiring the building for the income it generates. They underwrite the property based on net operating income, cap rate, and the quality of the lease. A below-market lease — like the ones many owner-occupants sign when they sell their company — significantly reduces what an investment buyer will pay. They value lease term, rent level, tenant credit, and cap rate.
Developer / Repositioner
A developer values the building based on what they can build or convert it into — not what it is today. Zoning rights are critical: a building with by-right residential conversion potential in a supply-constrained submarket may be worth significantly more to a developer than to any other buyer type. They value zoning, land area, location, and redevelopment potential.
Why the Buyer Type Determines the Price
Consider a 20,000 SF industrial building in Woburn, Massachusetts. The same building might be worth:
- $3.2M to an investment buyer — based on the current below-market lease at $8/SF NNN
- $4.1M to an owner-user — because comparable lease rates in Woburn are $12–$14/SF NNN, making ownership cheaper than leasing
- $4.8M to a 1031 exchange buyer — who needs to close within 45 days and is willing to pay a premium to avoid a $600,000 capital gains tax bill
- $5.5M to a developer — if the zoning allows for a higher-density use and the land value supports redevelopment
The difference between the lowest and highest price in this example is $2.3 million — for the exact same building. The owner who goes to market without understanding which buyer type will pay the most is almost certainly leaving money on the table.
The owner who goes to market without knowing which buyer type will pay the most is almost certainly leaving money on the table. In one case — an industrial building inside Route 128 — it cost the owner $4.15 million.
How to Think Like a Buyer Before You List
The three questions every buyer asks — and that every seller should be able to answer before going to market:
1. What do I need to SEE to be convinced this is the best deal for me?
Professional photography, clear floor plans, and a compelling narrative about the property’s highest and best use. Different buyer types need to see different things — a 1031 buyer needs to see lease documentation; an owner-user needs to see the functional layout; a developer needs to see the zoning map.
2. What do I need to KNOW to agree that the valuation is accurate?
Buyers insist on a lower price as a means of risk mitigation — they’re protecting themselves from what they don’t know. An organized, complete offering memorandum with financials, lease abstracts, environmental status, and title history removes the uncertainty that drives price reductions.
3. What do I need to BELIEVE to offer the right price?
Buyers need to believe the seller is trustworthy and that the process is fair. A competitive bid process with a clear deadline signals that the seller is serious and that other buyers are competing — which is the most powerful driver of a full-price offer.
Start Here
Know Which Buyer Will Pay the Most for Your Building — Before You List.
MANSARD models how each buyer type values your building, how their lender will appraise it, and what that means for your asking price and net proceeds. Zero obligation to list.