Delicate Deal: One Buyer, Many Sellers
September 29, 2014

Real-estate developers need to be skilled at a variety of tasks such as design, finance, construction and sales.

Sometimes it also helps if they are good at navigating the conflicting demands that arise when properties are handed down through generations, amassing a motley crew of owners with widely differing financial strategies.

Take the case of Alchemy Properties, a retail and residential developer in the New York region. Last year, Alchemy set its sights on a property that included the parking lot and low-slung shops at 846 Sixth Ave. as a site for a project with about 50 condo apartments and 13,000 square feet of retail space.

To buy it, Alchemy had to hammer out an agreement with about 17 owners, mostly descendants and extended family of a group of about a half-dozen men who bought it a half century ago. In the end, many of the stakeholders cashed out while others retained a stake in the retail piece of the planned development.

"You had two different sides we were negotiating with," said Kenneth Horn, Alchemy president. "It went up and it went down. It went sideways."

These deals are common, but they can take longer because two separate negotiations often take place simultaneously—an internal set of negotiations among inheritors of the property and another with the outside buyer, says Woody Heller, head of Savills Studley's New York capital transactions group.

"Internal negotiations often have emotion tied to it," Mr. Heller said. "Emotion is a much more difficult ingredient to introduce to negotiations..."

Delicate Deal: One Buyer, Many Sellers

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