What Is a Call for Offers in CRE?
A call for offers is a formal deadline set by a broker or seller requiring all interested buyers to submit their purchase proposals by a specific date and time. It creates a structured competitive bidding process that lets the seller compare all offers simultaneously, driving up price and improving deal terms.
How Does the Call for Offers Process Work?
The call for offers process follows a predictable sequence, though timelines vary by market, asset class, and broker. Understanding each phase helps buyers allocate underwriting resources effectively and avoid scrambling at the deadline.
Typical Timeline
- OM distribution (Day 0): The broker distributes the offering memorandum to their buyer list. This often happens on a Thursday or Friday afternoon, compressing the evaluation window.
- Confidentiality agreement (Day 1 to 3): Interested buyers sign a CA to access the full data room, including rent rolls, T12 statements, and property condition reports.
- Property tours (Day 3 to 10): The broker schedules group or individual property tours for serious buyers. Not all buyers tour before first-round offers.
- Q&A period (Day 3 to 14): Buyers submit questions about the property. The broker distributes answers to all bidders or provides a shared Q&A document.
- Offer deadline (Day 14 to 21): All LOIs must be submitted by the stated deadline. Late submissions are typically not accepted.
- Seller review (Day 21 to 28): The seller and broker evaluate all offers on price, terms, certainty of close, and timeline.
- Best and final (Day 28 to 35): Top 2 to 4 bidders are invited to sharpen their offers in a compressed second round.
What Do Sellers Evaluate Beyond Price?
Price is important, but it is rarely the only factor. Sellers and their brokers evaluate offers across multiple dimensions because the highest-priced offer means nothing if the buyer cannot close.
| Factor | What Sellers Want | Why It Matters |
|---|---|---|
| Purchase Price | Highest defensible offer | Obvious, but the offer must be realistic enough to survive due diligence |
| Earnest Money | 1% to 3% of purchase price, hard at PSA | Larger hard deposits signal conviction and reduce retrade risk |
| DD Period | 30 days or less | Shorter DD periods reduce seller uncertainty and time off-market |
| Financing | Pre-qualified or all-cash | Financing contingencies create closing risk. Pre-approval letters help. |
| Track Record | Similar deals closed recently | Demonstrates ability to execute, especially on value-add or complex deals |
| Closing Timeline | 45 to 60 days from PSA execution | Faster closings reduce market risk for the seller |
The Thursday 5 PM OM Drop
Experienced operators know the pattern: brokers frequently distribute offering memorandums late Thursday or Friday afternoon. This is not accidental. It compresses the evaluation window, forcing teams to work over the weekend or risk falling behind.
The team that can screen the OM, extract key metrics, build a preliminary underwriting model, and submit a thoughtful LOI fastest has a measurable competitive advantage. Brokers notice who responds quickly, and early engagement often yields informal guidance on pricing expectations that late responders never receive.
According to NAIOP research on institutional acquisition processes, the average time from OM receipt to first-round LOI submission has compressed significantly over the past decade. Teams that previously had three weeks now routinely face 10-day windows.
How to Compete in a Call for Offers
Winning competitive bids consistently requires a systematic approach to deal screening and underwriting. The firms that close the most deals are not necessarily the ones offering the highest price. They are the ones that respond fastest, communicate clearly, and demonstrate certainty of close.
- Screen against your buy box immediately. Kill non-qualifying deals within 5 minutes, not 30.
- Extract data from the OM on the same day. Rent rolls, T12s, and unit mix data should be in your model within hours, not days.
- Build relationships with brokers. Repeat performance matters. Brokers remember buyers who close cleanly and will share off-market deals or early guidance.
- Pre-qualify your financing. Have lender relationships in place and pre-approval language ready before you need it.
- Prepare a deal team summary. A one-page track record showing similar closed deals builds credibility with sellers.
What Happens After You Submit?
After the submission deadline, the seller and broker review all offers. This review typically takes 5 to 10 business days. During this time, the broker may reach out for clarifications or request modifications to specific terms.
If your offer is competitive, you will be invited to the best and final round, where the shortlisted buyers (typically 2 to 4) sharpen their price and terms. If you are not shortlisted, the broker will usually notify you, sometimes with feedback on why your offer was not selected.
Marcus and Millichap's research division publishes regular market data on transaction volumes and competitive dynamics across CRE asset classes. Understanding the current competitive environment helps calibrate how aggressively to bid.
Common Mistakes in Competitive Bidding
The most damaging mistake is submitting a high offer you cannot defend during due diligence. This leads to a retrade, which damages your reputation with brokers and makes future deal flow harder to access.
- Overbidding to win, then retrading: Brokers track this behavior and will deprioritize your future offers.
- Submitting after the deadline: Late offers are almost always rejected. Plan your underwriting timeline backward from the deadline.
- Insufficient earnest money: A thin deposit signals low conviction and will lose to a comparable offer with harder money.
- Ignoring the broker relationship: Calling to introduce yourself, asking smart questions, and communicating proactively all influence how your offer is presented to the seller.
Off-Market Deals vs Call for Offers
Not every deal goes through a call for offers. Off-market transactions (also called "quiet" or "whisper" listings) bypass the competitive bidding process entirely. The seller works with one buyer at a time, typically through a broker relationship or direct outreach.
Off-market deals offer buyers less competition and more time to underwrite, but they also carry less price transparency. Without competing bids, both sides have less certainty about fair market value. Buyers in off-market situations should still apply rigorous underwriting and avoid overpaying due to the perception of exclusivity.
Building broker relationships that generate off-market deal flow is a long-term investment. Consistently closing cleanly on marketed deals (through the call for offers process) builds the reputation that earns you first calls on off-market opportunities.
Anatomy of a Strong First-Round LOI
Your letter of intent in response to a call for offers should be concise, specific, and easy for the seller to compare against other offers. A strong LOI covers the following elements on one to two pages.
- Purchase price: A specific number, not a range. Ranges signal indecision.
- Earnest money: Amount and when it goes hard (at PSA, after DD, at specific milestones).
- Due diligence period: Number of days. Shorter is stronger.
- Closing timeline: Days from PSA execution to closing. Include whether financing is pre-arranged.
- Financing structure: Debt/equity split, lender status, or "all-cash" if applicable.
- Contingencies: List any (financing, partner approval, board approval). Fewer is better.
- Buyer background: One paragraph on who you are and 2 to 3 relevant transactions you have closed.