It’s a year before your lease expires and it seems you have a target on your body. Almost every day you receive yet another cold call from a broker.
How do they even know when your lease is up or that you’re the person in charge?
That’s the easy question. Since the early 1990’s, commercial agents have had access to proprietary commercial databases that not only allow the commercial brokers to access market information, but also to gain access to lists that name the tenants in a building, the rents paid, the name of the contact person, the size of space, and the lease termination date. While all this information is not perfectly accurate, it’s enough to start the wheels rolling.
Is there anything you can do to stop the calls? Yes, but first a bit of background.
The National Association of Realtors® (NAR) addresses solicitation in its Code of Ethics. If a property is not listed, agents are free to call the owner and solicitate their business. If a property is listed, the agent can contact the owner and ask if when the listing expires, and the property is not sold, would the owner consider changing their listing agent?
Unfortunately, very few commercial agents in California are members of the NAR so non-members are not “required” to abide by that code. To make matters more complex, there are absolutely no guidelines for dealing with tenant/agent relationships. This leads to both another question as well as a solution to the problem.
First, the question. If you are a tenant, what is your relationship with your broker? Was it a one time “space finding mission” or is it an ongoing relationship?
At IN/House, we are engaged by our clients under an Authorization to Engage Services Agreement to serve on a continual basis to not only handle transactions but also to provide real estate advisory services. We become part of our clients’ management team. So, when those peaky cold calls come in, our clients simply gives the cold caller our name as the person in charge of their real estate. If the cold caller is a listing (or dual) agent, they will usually call me to discuss the property they have listed. If they are a true tenant broker they will usually be respectful and say good luck and may even close by saying that if they ever are looking for a change, they hope to be considered. These are all ethical and in line with the NAR code as well.
Yes, some cold callers will never take no for an answer. In fact, two law suits have recently been filed in Los Angeles against a broker who never quits, and in doing so defamed two reputable tenant brokerage firms. Sadly, the Department of Real Estate (DRE) does not have an ethics board to address these issues for commercial transactions as does the NAR for its members who are, for the most part in California, residential agents and commonly referred to as Realtors®. So, the only resolution in commercial dealings is through the courts.
How do you short circuit the plague of cold callers? If you don’t have that long term and
ongoing relationship with a broker, the best fallback may be to just say you do and that you are very happy. Then either call the broker you last worked with and assuming you were pleased with his service, invite him so you can update each other on your facility plans. If you can’t remember who he was, yes that does happen, or you weren’t pleased, call some friends and ask for recommendations.
Remember that market knowledge only takes you so far. It is the skills the broker brings to the table and the services he can provide that meets YOUR needs rather than his, that will determine how successful your real estate management goes. It’s your time and your money.