A short and sweet checklist to help you choose a commercial real estate broker
Your commercial real estate will soon be vacant and you have decided that your best shot at getting your building leased or sold quickly is to list the building with a commercial real estate broker. So, what factors should you consider when making your choice?
Global, national, regional, or local firm. The nature of your commercial real estate will largely determine your need for a global, national, regional, or local firm. Specifically, if the marketing of your CRE can benefit from exposure in Sri Lanka or Abu Dhabi, a global firm can provide this. Conversely, if your building will appeal to the neighbor, a local firm could be a great choice. A nice compromise would be to choose a national or a regional firm. I have the benefit of working with a national firm. We have 54 offices around the US. However, our knowledge of the local commercial real estate landscape is as good as any local firm – because we started as a local firm and have grown our platform from that basis – strong local knowledge.
Background, tenure, experience. Length of time in the business is not the only factor to consider but it certainly is a key component of choosing the right representative. Certain firms encourage their agents to form teams of several practitioners. Other firms are a collection of sole operators. Generally, the teams are comprised of a senior “rain maker” and one of more junior associates. Two key considerations of hiring a team vs. a sole operator – make sure you know who will be the single point of contact within the team. Often, a firm that interviews with a team will have an impressive array of seasoned brokers. You may be drawn to a specific member of the team. But what if that member pawns you off on a junior associate? If you are considering hiring an sole operator within a firm to market your commercial real estate, make sure the individual has sufficient support to handle property inquiries, marketing, and showings.
Knowledge of your market. Does the team or individual commercial real estate broker, that you are considering hiring understand your specific market. You don’t want to engage a firm that specializes in multi family investments if your commercial real estate is a single tenant industrial building. Additionally, if your building is a 50,000 square foot office building in Orange County, California, how conversant are they on activity within that specific submarket? Can they talk about deals that have transacted, competitive spaces that are available, and potential occupants that are looking? If the answer to these questions is yes, chances are you are considering the correct representatives.
Complimentary vs. competitive listings. There is great benefit to you that your representative has control of other complimentary available buildings in the market. Complimentary listings are those larger or smaller than yours. Listings typically have signs (both physically and digitally) advertising their availability. These signs will generate inquiries from potential occupants. It is important that your representative be well represented in the market so that these inquiries will pour in. I would caution against hiring a broker with many competitive listings to yours, however. If an agent is marketing four buildings of similar size, amenities, and price – to whom does his loyalty lie?
Does she play nicely with others. Last on the list, but first in my opinion. Your commercial real estate representative is tasked with marketing a large portion of your net worth – a piece of you! Whomever you choose should wake up everyday determined to find an occupant for your building. Remember, they are your gatekeeper to the commercial real estate market – the occupants that inquire, the active brokers who represent suitable occupants, and occupants that operate in a similar industry or that are located close buy. If you can’t imagine the person representing your interests – don’t hire them! Ask for the names of their three biggest competitors and call them. See what their competition has to say. This can speak volumes about the person you are hiring.