Owners are getting edgy about off-market deals, says Sturner.

Long known as the master of the preemptive bid and for his ability to coax owners to sell him buildings off-market, Murray Hill Properties' principal, Norman Sturner, expressed at a recent NRC luncheon how difficult it is getting lately to employ such techniques--typically used by investors hoping to bag a highly contested asset at just below the stratospheric pricing a bidding war is sure to produce. With some amazement still detectable in his voice, Sturner recalled his failed bid for the class A trophy 230 Park Avenue in October 2005.

After coaxing his investors to back him on a $660 million offer in the later rounds he was sure would take the deal off the table, Sturner was met instead with the news that the crown prince of Dubai, Sheikh Mohammed Bin Rashid Al Maktoum, had swept the property away for $705 million, an amount none of the many vying bidders could possibly trump.

The deal--which a source familiar with the transaction said will produce almost no cash flow for the Sheikh because of the size of the mortgage--came as a startling example of the might of petroleum dollars. But in a recent conversation with REW, Sturner revealed that, regardless of the prolificacy of that class of investors for whom it seems money is no object, he expects to continue to be able to grab properties in off market or pre-emptive deals.

In fact, Sturner revealed that he now has another prominent property in his sights, declining of course to go into details so as to prevent other potentially interested buyers from swooping in.

Sturner's last such acquisition came in his purchase of architectural gem 450 Lexington from Shorenstein Properties in April 2005 for $400 million in an off-market deal many investment sales brokers considered a steal.

In describing the attractiveness of off-market transactions to the seller --despite the reputation that they often don't yield peak values--Sturner said that many owners are leery of the way in which sales books, which are put together by the brokers working on the deal and disseminated to potential buyers, so thoroughly expose the normally secret workings of a building.

"Everything is in the book and many sellers don't want to open up their bathrobe like that," Sturner said.

"Brokers get to see everything and before you know it, they'll be approaching a tenant just before that tenant is ready to renew offering a better deal right around the corner. Tenants get to see other tenants' rents and, all of a sudden, you'll have a guy complaining that someone on a higher floor pays less than he does."

"Owners are very nervous to do that because if for any reason they have to take it back off the market, now the whole world knows what's wrong with the building."

Acknowledging the preference many owners still have for a formal bidding process, Sturner has turned some of his focus away from Manhattan to areas where the competition is not quite as fierce and bids can more easily be won.

Murray Hill Properties is currently bidding on a roughly 500,000 s/f office building in Northern Westchester owned by Steve Witkoff.

"It's a great building and it's not a beauty contest with the Sheikh," Sturner said.

"I won't chase and if that means sitting on my hands I'll do that. I'd prefer to go to Westchester."