How Do Landlords Benefit
From Commercial Real Estate Brokers?
Building Owners and Landlords often only think about commercial agents when they need help filling vacancies. While filling commercial vacancies is a central part of a broker’s role, it’s a gross oversimplification of everything they can do and how they create value.
Commercial Real Estate Brokers Are Not Salespeople
Brokers are Business Consultants, Advisors and Partners. Their specialty is creating value from real estate investments. Their purpose is to help you maximizing the potential of your property and your tenant relationships.
In simple terms, you can break down the value into three broad categories: Strategic Planning, Maximizing Revenue, and Filling Vacancies.
Whether you’re planning to purchase a building, or facing significant change, there are times when you need to reposition, reorganize, or reimagine a property. Your commercial realtor needs to be part of that conversation.
Why? Because they know the market. They know what your competitors are doing, what’s being built, and what potential tenants are asking for and getting from others. They have access to all kinds of industry, tenant, and statistical data to help put your property into context. When combined with your own data and goals, you can develop workable options and move forward with greater confidence.
What’s important is to invite your broker into strategic planning conversations at the start of your planning process.
Strategic planning is always central for increasing your revenue and earnings potential. But there is also a tactical level conversation. Your broker will discuss tactics such as refining your positioning, tightening business practices, revisiting your tenant mix, reconfiguring space, evaluating additions, renovation options and tenant incentives, leasing practices and more.
The most obvious value of a commercial real estate broker is helping you fill vacancies with desirable tenants. But this activity is enabled by effective implementation of your strategic and tactical plans.
A good brokerage builds upon a career of relationship development. Relationships with other brokerages, lawyers, property managers, franchises, and related industry professionals. These relationships are often the grease that expedites the process of filling vacancies.
However, beyond these relationships, they also develop sales and marketing plans for your building. These should include traditional mechanisms like signage and database listings. But more and more, there is a need to incorporate search engine and social media marketing. Now, the pandemic has prioritized virtual tours and improving the quality of online listings.
Brokers Are Strategic Partners
As you can see there is a lot more to commercial real estate than pitching properties. Depending on your business and your property portfolio, your broker can become a vital strategic partner who helps you facilitate growth.
Your broker is not a passive helper doing what they’re told. They are a key driver in the process. They don’t add to your stress and workload, they actively move your agenda forward for you.
They can offer this support right from the seed of an idea, through implementation and beyond. A good commercial real estate broker should leave you feeling well supported.
How Do You Select A Broker?
There are several factors to consider, but these are the most important.
- How many properties are they working on? More is not always better. Your broker needs to have time to support you and to represent your property. If they’re spread too thin, you’re not going to get the attention or support you need.
- What is their specialty and how much experience do they have with your type of operation? For a broker to advise you well, they need to understand your business requirements.
- Similarly, they need to know the local market and have relevant industry connections to help you move through the process quickly, while avoiding costly problems.
- What is their fee structure? Since there are no standard commissions in commercial real estate, you need to understand their fee structure. It is important to find a good fit in this regard.
- A modern approach is vital. While some traditional marketing is still important, search engines, social media and virtual tours are becoming essential tools of the trade. The industry tends to be slow to adopt new technologies, so you’ll want to look for a progressive brokerage who uses modern tools and techniques.
- Your broker’s business culture and internal compensation model is also important. A collaborative compensation model means their whole team can work together on your project. The alternative is for everyone to compete with each other. Internal competition can effectively nullify the advantages of working with a large brokerage.
There are certainly more factors to consider, but these are a good starting point to frame your search. We’d be happy to continue this discuss with you if you’d like to learn more or if you have a project in the works.
Jeff is the owner and Broker of JR Mercantile Real Estate Advisors Inc. with more than 20 plus years of commercial real estate advisory experience. With a focus of inner-city development and mixed-use development, Jeff participates early in the design phase to help ensure the commercial environment is not only readily leasable but workable for both Landlord and Tenant.
Jeff’s client base ranges from institutional landlords to local entrepreneurial developers and from high profile restaurateurs to national retailers.