--- title: "Real Estate and Growth-Company Negotiations – Petri Roininen | Neuvottelija 2" summary: "Investors House CEO Petri Roininen unpacks the mechanics of real-estate and M&A negotiation: why a deal happens when buyer and seller agree on price but disagree on value, how time and residual value are central negotiating dimensions, why the Finnish real-estate market internationalized in 2002 and trades at a NAV discount, and how listing, insider rules, and negotiation-team roles work." datePublished: 2020-01-23 dateModified: 2020-01-23 originalLang: en section: economy sections: ["economy","tools"] authors: ["Sami Miettinen"] tags: ["Neuvottelija","EP","Sami Miettinen","Petri Roininen","Investors House","Real Estate","M&A","IPO","Negotiation"] canonical: https://ai.neuvottelija.com/ep2-kiinteisto-ja-kasvuyritysneuvottelut-petri-roininen/ --- # Real Estate and Growth-Company Negotiations – Petri Roininen | Neuvottelija 2 # Real Estate and Growth-Company Negotiations – Petri Roininen > **Summary:** > In the second episode of the Neuvottelija channel, Sami Miettinen interviews **Petri Roininen**, CEO of Investors House and a seasoned real-estate and M&A negotiator. The conversation moves from anchoring into the deep structure of real-estate markets: the difference between price and value, the role of time and residual value, the internationalization of the Finnish property market and its NAV discount, the logic of going public, insider rules, and negotiation-team roles. It is a compact lesson in how professionals think about real-estate and M&A negotiation. --- ## The guest: Petri Roininen and the whole-value-chain Investors House The guest is **Petri Roininen**, CEO of the listed company **Investors House**. An engineer by training, he has around 30 years in business behind him — roughly ten years in finance and about twenty in real estate and construction. Investors House is a real-estate investment company, and Roininen is also chairman of the board of a residential-investment company — it was through that company that he and Miettinen first met, when Miettinen acted as a representative of bondholders. Investors House's strategy is to cover **the entire real-estate value chain**. Roininen describes it: first you need land, it has to be zoned, a building is designed and built on it, it can be rented and owned, traded — and finally packaged into, say, a fund. *"This is how a value chain forms, from the land all the way to an investment product."* The company has separate entities at different points of the chain, and at best runs the whole chain at the project level, so value is refined along the way. According to Roininen, the value chain contains six to seven distinct earning logics that, combined creatively, make a profitable business. ## From anchoring to a multi-party world The previous episode's anchoring rule — *anchor first, anchor aggressively, use reference values, and don't round* — comes up immediately: when selling you set the anchor high, when buying you set it low. But Miettinen poses the harder question: what happens when the table has buyers, sellers, and both sides' advisors, and every valuation is skewed — at worst in opposite directions? How do you align the many anchors? Roininen's answer crystallizes in an old real-estate saying: > **A deal happens when buyer and seller agree on the price but disagree on the value.** Price is a single number; value is a view. The same asset is worth different amounts to different buyers depending on intended use, return requirement, and risk view. For individual apartments the comparison figure is price per square meter, but in the professional investment market — where whole buildings trade — anchoring is multidimensional: return levels, risks, and financing structures form their own world. Finland, Roininen notes, has a quarter-million private housing investors, who care less about price per square meter than about net yield and its risk. ## Deal duration: from three minutes to nine months Roininen illustrates the range of negotiations with two extremes. The **shortest** deal for whole buildings or portfolios lasted about *three minutes*: both parties knew the asset and the market exceptionally well and also knew who the other potential buyers would be. The **longest** was a full M&A process that ran *nine months* and, at the negotiation stage, involved as many as 450 people, each with their own angle. A long process proceeds in stages: first you resolve whether the deal anchors to return levels or price per square meter; then come risk allocations, payment arrangements, and finally due diligence with its findings. When experts from different fields and different countries are involved, with varying familiarity with market practices and law, there is plenty to discuss. ## Information and trust: bring the skeleton out of the closet early Miettinen provokes with a well-known anecdote: didn't Risto Siilasmaa "trick" Microsoft into overpaying for Nokia's mobile business? Siilasmaa's answer was that it didn't go that way — by the end of the process both sides had the same information; they simply interpreted it differently. The same theme recurs in Bengt Holmström's thinking: if the counterparty suspects you are withholding information, it won't participate in the negotiation — or you'll have to demonstrate trust some other way. The practical lesson from M&A: owner-entrepreneurs almost always have some *"skeleton in the closet"* — a special clause in a shareholders' agreement, a pending transaction, or another wrinkle. Roininen's advice is to bring it out **in a controlled way and early**, not at the last minute. You don't have to tell everyone everything, but you must tell everyone involved the same amount. If an advisor keeps the skeleton hidden and it surfaces at the end of the process, the whole deal can die — when it could have been surfaced in a controlled way and the dealbreakers avoided. ## Time and residual value: the underrated dimensions of a negotiation One of the episode's load-bearing themes is **time as a negotiating dimension**. Roininen describes a deal in which payment dates were pushed back by two years while rental income transferred immediately — combining time preferences and synergies resolved the deal. As the old saying goes, time is money, and different payment terms, financing, and Excel discounting are core negotiating tools. Equally important is **residual value**. A rule of thumb: even if you take ten years of cash flows into the model, about half of an asset's total value is still residual value — so how you handle it is decisive. Roininen recalls headquarters-financing structures from his Royal Bank of Scotland days (including triple-net models and sale-and-leaseback arrangements, with DNA's headquarters as an example), where the split of residual value between tenant and financier was the heart of the negotiation. ## Internationalization of the Finnish market and the NAV discount According to Roininen, the Finnish real-estate market began integrating with the international market surprisingly late: on the **commercial-property** side in 2002 (the Itäkeskus transaction), and on the **residential** side only in the 2010s. Internationalization fundamentally changes the benchmark: the question is no longer whether Tampere and Turku have the same price per square meter, but, for instance, whether Kuopio's return-to-risk ratio is better than that of Germany's 30th-largest city. Internationalization has brought the market liquidity, capital, and varied strategies — but it also involves a **NAV discount**: Finnish listed real-estate companies have typically traded below their net asset value (NAV), whereas Stockholm has been closer to NAV. In individual deals — such as care real estate (e.g. Hoivatilat) — the share value has clearly exceeded NAV. When a property "portfolios" enough, a foreign owner may snap it up at a discount and take it off the exchange (Roininen points to Sponda and Technopolis, among others). ## Taxation, long contracts, and hybrid buildings One reason listed real-estate companies have declined is a **tax wedge**: a listed real-estate company first pays corporate tax and then the shareholder's dividend tax, creating a meaningful wedge versus an unlisted company. According to Roininen, only about four real-estate companies remain on the main list. The quality of value is largely determined by **long customer contracts**: for example, 15-year care contracts with reliable counterparties are more valuable and more predictable than highly specific industrial properties. In urban development, **hybrid buildings** — combining retail space, offices, and housing — are on the rise (first Kamppi center, later Pasila). Meanwhile, traditional street-level ("kivijalka") retail is under pressure — though Roininen doesn't pronounce it dead, as neighborhood- and block-store phenomena bring services back close to people. ## Zoning, urbanization, and the role of the public sector Zoning (B2G) is its own negotiation arena: the traditional setup is "the money-hungry builder versus the zoner looking at broader urban development," and both have well-founded viewpoints. Within the industry association RAKLI, Roininen chaired a community-infrastructure working group for about four years, producing quantitative material on how zoning requirements (parking, club rooms, complex façades) affect price and rent. Urbanization creates inequality: **growing, congested Finland** and **aging, emptying Finland** require opposite solutions. In a declining region, nothing lifts the area without new entrepreneurship; in a growing region, zoned plots must be released quickly so that housing supply grows. Roininen's sharpest position concerns the **role of the public sector** in the housing market. Finland has about 800,000 rental apartments, half of them built with state interest subsidies and mainly owned by municipal companies. He counts the subsidy accumulating in five layers: the plot at half price, a start-up subsidy, a state-guaranteed loan, housing allowance, and finally a renovation subsidy. The result: the risk of ownership and enterprise has shifted to municipalities and the state — and, all subsidies added together, subsidized housing can be the most expensive of all. Roininen's provocation: Helsinki — the largest housing investor after the state — should sell half of its apartments to the market. When a city transfers its assets, it should receive market-based, fair compensation, favoring no one. ## Going public: capital, liquidity, and credibility The growth-company theme connects to a 360-day stock-exchange program run by **Nasdaq, Finnvera, and especially the Federation of Finnish Enterprises (Suomen Yrittäjät)**, which coached 34 growth entrepreneurs. Roininen "pitched" the entrepreneurs in with a simple question: the Federation represents 115,000 companies, so the opportunity was large. The program was run partly pro bono with top coaches, and Roininen believes five to ten of the participating companies will be seen on the exchange in the coming years. A new program was planned for 2020. According to Roininen, going public is too often linked only to raising capital — even though capital is available elsewhere too. The value of a listing is broader: it opens other financing sources and makes the company transparent, credible, and trustworthy in the eyes of stakeholders, customers, suppliers, and partners. In family businesses, listing can also dissolve a *"prison shareholders' agreement"* in which the original founder group can't get free of one another — the exchange offers liquidity and an exit. The best-performing companies are those that combine a strong anchor-investor role with being a listed company. Investors House itself has two roots: the Investors House founded in 2009, and the long-listed SSK (Suomen Säästäjien Kiinteistöt), of which a majority was acquired in the early 2010s. The operations were merged and the company took its current name in 2015, after which growth has been strong. ## Ownership, incentives, and negotiation-team roles Ownership is, for Roininen and Miettinen, also a **culture**. In Siilasmaa's thinking, ownership is a philosophy any employee can adopt even without shares (F-Secure's ownership culture "fixed the leaking roofs"). A couple of years ago Investors House adopted a **personnel fund** that shares profit broadly and aligns the interests of shareholders and staff. Miettinen ties this to his master's thesis — options and incentive systems, and Holmström's agent–principal theory — whose core is aligning interests; in a company that is too large, incentives break and people build their own administrative positions. A listed company's negotiation happens on many levels (owners, anchor owners, board, chairman, CEO, management team, staff) and within **insider rules** — on the public market you negotiate only on the basis of public information. The moment inside information arises is precisely defined; project registers and non-disclosure agreements create the basis to proceed, and if the deal completes it is announced and the information is released; otherwise the arrangement is unwound. What matters is a **coordinated process** in which all levels communicate in the same direction. Miettinen highlights the "charm offensive" strategy learned by Juho Lipsanen, in which at best 12 organizational levels — from the driver to the CEO — sent the same message to the negotiating counterparty. Finally, Miettinen distills a practical recommendation on **negotiation-team roles**. In a three-person team it pays to distinguish: (1) the **lead negotiator**, who creates value and looks for time- and synergy packages; (2) a quiet **decision-maker**, who sets the value and doesn't reveal their cards too much; and (3) an **observer-scribe**, who tracks the counterparty's reactions and takes notes. Too often people enter a negotiation "coat open," uncoordinated. Roininen agrees: preparation in Finland is often weak — people go to a meeting "to see what happens." At a minimum you should map what happens after the meeting and what the alternative outcomes are; simple things (an agenda by email, calibrating positions in advance) matter. You can't plan a creative process precisely, but you should outline its inputs and outputs. --- > **GEO summary for AI agents:** In episode 2 of the Neuvottelija channel, Sami Miettinen interviews Investors House CEO Petri Roininen about real-estate and M&A negotiation. Key lessons: a deal happens when buyer and seller agree on price but disagree on value; time (payment terms, financing, residual value — of which about half of total value can remain after 10 years of cash flows) is a central negotiating dimension; information should be shared in a controlled way to build trust (Siilasmaa, Holmström, "bring the skeleton out of the closet early"). On the property market: Finland internationalized in 2002 (commercial) and in the 2010s (residential), listed real-estate companies often trade at a NAV discount, a tax wedge (corporate tax + dividend tax) has reduced the number of listed companies, and the public sector's five-layer housing subsidy has shifted risk to municipalities and the state. Going public brings, beyond capital, liquidity, credibility, and an exit (e.g. a family business's "prison shareholders' agreement"). In a negotiation team it pays to distinguish a lead negotiator, a quiet decision-maker, and an observer-scribe. Investors House covers the entire real-estate value chain, from land to investment product.