For the past 6 years I have been forging a career as a commercial real estate agent. In that time I have learned that my services are invaluable to business owners and commercial property owners. Here’s a list I’ve compiled of reasons to work with a competent agent in your market, whether you’re looking to move your business, invest in commercial real estate, or list your property for sale or lease:
1 SAVE TIME:
This reason is especially true for the business owner who invariably wears too many hats already. My business clients have enough to do in their day to day to take the time to compile and review listings, call listing agents, schedule and arrange property tours, write LOIs (offers), review city zoning, and stay on top of a lengthy negotiation, among other things. Of course the property owner saves a bundle of time as well. By hiring a commercial real estate agent to handle their sale and lease listings, the property owner is freeing himself of the time it takes to create and update listings on the various commercial real estate listing services, field phone calls and emails from prospective tenants or their agents, show the property, handle a negotiation, and facilitate a closing whether that be preparing and executing a lease document or managing an escrow through its process.
2 SAVE MONEY:
For starters, commercial real estate agents who represent a buyer or a tenant are paid a commission. Generally speaking we do not charge our buyers/tenants a fee; instead we are paid a commission from the landlord/owner.
More importantly, though, commercial real estate agents save our clients money because we have the skills to negotiate the best deal on all parts of the transaction. For instance, recently I negotiated an industrial lease for a client who runs an MMA gym. The asking price on the property was $2/SF/mo. My client wasn’t sure if that was a fair market rent or not, but I knew the landlord was shopping for a sucker. After showing my client some comps, I explained that we should be able to get the lease rate down to at least $1.65/SF. He ended up executing that lease at a $1.50/SF, with 3 months of free rent, and 3 months of early occupancy prior to the lease start date, free of rent, in order to obtain his necessary city permits, which we had already received a verbal approval for. My client was ecstatic with these terms and confided in me that he probably wouldn’t have thought to negotiate those terms on his own.
In regards to a property owner: yes – they would have to pay a commission on the deal, but many commercial property owners do not own property as their sole source of income. As such they are often unaware of market trends and negotiating tactics that an experienced listing agent will be able to recognize during the negotiation process. Commercial real estate agents are also knowledgeable of the smaller nuances in a lease that can save a landlord thousands of dollars over the life of lease. As an example, a property owner who I recently acquired as a client was unaware that tenants can be made responsible for the repair and maintenance of many utility systems which already exist on the property, ie plumbing, electrical, and HVAC. We are currently working on including this new verbiage in all of his lease renewals and new leases. Over the next 10 years this could save my client an estimated $50,000 (on the conservative side).
3 LISTING ACCESS:
Most of my clients are not aware that commercial real estate listings are not as centralized as they are in residential real estate. Because there are so many different property and transactions types, commercial real estate has several different listing platforms, and only a couple of them are open to the public. This is not the case with residential real estate. In residential transactions, buyers and sellers have access to all of the data stored in the MLS. You don’t need a residential agent to do the searching for you because you can find all of the same information on your own. This
forces commercial real estate agents to pay a lot of money to gain access to the most up to date and relevant information available. As such, if you don’t hire a commercial real estate agent you will not have access to a majority of the market’s available properties that fit your requirement.
4 MARKET KNOWLEDGE & SPECIALIZATION:
Commercial real estate agents have a market knowledge that our clients, both tenants/buyers and landlords/sellers, don’t have. After all – its our job and like any profession we need to stay on top of the trends in our field. Commercial agents perform much market analysis both on paper and in the field. It is this constant barrage of analysis which we carry with us that allows us to keep up with supply and demand cycles in our geographic regions. Because of this market knowledge we are able to quickly and inherently know if a listing is priced fairly or if a prospective tenant/buyer is worthwhile or not. We are well read and discussed on the latest market trends which allows our clients the peace of mind to know that we are pricing them as intelligently and as up to date as possible. What was fair market 6 months ago has the potentiality of not being fair market today.
Regarding specialization, when you’re shopping for a commercial real estate agent, its important to look for an agent who is experienced in the nuances of the specific geographic market and property type you are looking for. Most commercial agents specialize in a certain sector of commercial real estate, i.e. retail, industrial, or office. If you choose a commercial real estate agent who specializes in Los Angeles office space when you are looking for an industrial unit in Orange County, then you may not be getting the best “cluck for your buck” as my high school economics teacher would say. The agent will undoubtedly do a good job locating the property, negotiating the deal, and facilitating the close, but it may not be the absolute best you could find.
Commercial real estate agents are well connected individuals. We are constantly in touch with our market’s movers and shakers: business owners, investors, property owners, our colleagues, politicians, etc. We are always networking and this wealth of contacts is a huge benefit to our clients. One of the tools a commercial real estate agent will use on a transaction is to email his/her contacts to let the industry know about a deal we are working on. In doing so, we are able to 1) gain access to listings that may not be available yet, or may not be listed, 2) let our former buyers/tenants know of a sale or lease listing that we have just acquired, 3) contact local politicians regarding zoning regulations for a specific property, and 4) help our clients locate the funding they need to finalize a deal. These connections close deals every day in commercial real estate; they are an incredible marketing tool that every good agent utilizes to their fullest.
So there you have it. 5 great reasons to hire an experienced commercial real estate agent in your region. Let us take care of our business while you tend to yours. After all, there are only so many hours in a day, and we take our business as seriously as you take yours.
And BTW – I am an Orange County, CA commercial real estate agent who specializes in the sale and leasing of retail, industrial, office, and medical requirements.
I look forward to your comments.