Updated August 16, 2026
This question almost never comes from a single owner. It comes from siblings who inherited a building together, from a partnership where one member wants out, or from a family where one branch needs liquidity and another wants to keep the asset. The instinct is reasonable: if I own a third, let me sell my third and leave the rest alone.
The market's answer is blunt. A fractional interest in a privately held apartment building, with co-owners the buyer did not choose, is one of the least liquid assets in real estate. It can be sold. It sells at a discount that usually makes it the worst of the available options — which is why the realistic buyer is almost always another co-owner.
No control. A minority holder cannot decide to sell, refinance, distribute cash, replace the manager or approve a capital project. They are along for a ride someone else is steering.
No liquidity. There is no market for one-third of a twelve-unit building in Van Nuys. Exiting later means finding another buyer with the same tolerance, or forcing a partition.
Unchosen partners. The buyer inherits your co-owners, their disagreements and their timelines.
Distribution risk. Even when the building performs, whether cash actually reaches a minority holder depends on decisions made by others.
Appraisers apply discounts for lack of control and lack of marketability precisely because of these features. Applied together on a minority interest they are substantial, and the practical market discount is frequently wider still.
In practice a partial-interest sale is a buyout, and the counterparty is another owner. That is not a failure of the market; it is the market working correctly. The remaining owners are the only parties for whom the interest is worth close to its proportionate value, because for them it consolidates control rather than fragmenting it.
Which reframes the question. It is not "how do I sell a third of a building" but "what is a fair price for the co-owners to buy me out, and how do we fund it."
An independent valuation both sides can see. Almost every one of these disputes is nominally about whether to sell and actually about what the building is worth. The exiting owner believes it is worth more; the staying owner believes it is worth less; each belief matches their position. A documented, comparable-based value collapses most of that.
Reading the agreement first. Many operating agreements, partnership agreements and TIC agreements already contain a buy-sell mechanism, a right of first refusal, a valuation method, or a deadlock provision. Owners regularly negotiate for months without checking whether the answer was drafted years ago.
A funding path. The staying owner has to produce cash. Usually that is a refinance, which on a rent-stabilized building with capped income may not raise as much as everyone assumes — worth testing before terms are agreed.
Modeling the property tax consequence. A change in ownership can trigger reassessment depending on the structure and how much of the interest transfers. On a building held at a decades-old assessed value, that is a large number and it belongs in the analysis before the price is set, not after.
Actual tax advice. Whether a buyout is a sale of an entity interest or of real property, and how it is taxed, depends on the structure. Two transactions that look identical to the owners can be treated very differently.
Where one owner wants cash and another wants to exchange into a replacement property, that can sometimes be structured — but it has to be planned well in advance of a sale, and it depends on how title is held and how the entity is treated for tax purposes.
Owners who discover this desire two weeks before closing generally cannot execute it. Owners who raise it at the beginning often can. It is the single most common avoidable disappointment in co-owned sales.
I get everyone looking at the same number first. An independent, comparable-based valuation, presented to all owners simultaneously, resolves more of these than any negotiating tactic — because it removes the thing each side was arguing from.
Then three questions. Can whoever wants to keep it actually fund a buyout? What does each owner net under a buyout versus a whole-building sale, after tax and after any discount? And what does the governing agreement already say?
Most of the time the answer becomes obvious once those are on the table. And where owners still cannot agree on value, the market settles it: a real marketing process produces real offers, and offers are not opinions.
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