How Do Tenants Benefit
From Commercial Real Estate Brokers?
Business owners often only think about commercial agents when they need new space. They have brokers pegged as part of a real estate transaction. While it is true, real estate transactions are important, it’s one of the last steps in the process of how brokers add value.
Unfortunately, people often misunderstand the role commercial brokers play.
Commercial Real Estate Brokers Are Not Salespeople
Brokers are Business Consultants, Advisors and Partners. Their specialty is creating value from real estate investments. This value comes in many forms, including from:
- Market research
- Strategic planning
- Access to clients and suppliers
- Creating operational efficiencies
- Staff recruiting and retention
- Access to industry professionals
- Support during real estate transactions
- Bringing properties to life
That’s a lot more than pitching properties all day. And depending on your business, they can become a vital strategic partner who helps you facilitate growth.
To keep things simple, let’s consolidate these values into four key areas: Advice, Access, Efficiencies and Support.
One of the most valuable contributions a commercial broker provides is advice. They know the market, other brokers, and many of the property owners well. They can advise you on how to think about real estate, define your needs and identify important things to consider like zoning, competitors, and local amenities. They can direct your budgeting and business planning and help to refine your search and select the right location.
Once you’ve found a property, they help you get the attention and interest from building owners. They coach you through the transaction and set realistic expectations as well.
Once you’ve secured a property, they’ll introduce you to all the other professionals you’ll need to get the site set up and operating, with a plan to bring the property to life.
After advice, access is the next most significant contribution brokers make.
What does access mean?
You need access to a lot of information for site selection. You need access to the commercial property database. You need access to buildings, other brokers, building owners, insider information and industry norms, lawyers, tradespeople, and specialists of all sorts.
Imagine how long it would take you to access these data and people on your own.
In the long-term, what you get from any real estate investment is efficiency. The physical space either allows you to operate effectively or it holds you back and hinders growth. It either works for your budget and staff or it strains you further. Your location and proximity to clients, suppliers, transit, and shippers will either make you productive or cost you time and money. The list of factors to consider is long and unique to each business.
Your broker works you through all the thinking and options to help you make good choices.
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.
Understand the Value Now?
It does not matter if it is your first lease or your 500th, your relationship with your commercial broker can be as important to your growth as any other strategic partner.
How Do You Select A Broker?
There are several factors to consider when selecting a broker, 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 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.
- 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’ll be happy to continue this discussion 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.