Too often companies, particularly small companies, look at their real estate needs as a necessary evil that needs attention every three to five years. In reality, real estate is not only the number two-line item on most firms’ financial bottom line for expenditures, but is also an integral part of a firm’s planning and culture. In today’s world that could mean everything from planning for growth to the shape and form of the firm’s work space as it might relate to attracting qualified employees in today’s changing work environment.
Too often issues come up during the lease term that need attention. This might include responding to landlord notices, understanding what the notices mean, concerns that arise about the suite or building itself, or how your present space and lease parallels your company’s growth or contraction.
In a study done by UCI Graduate School of Business Management in 1993, and apparently nothing has changed, most small businesses shift their real estate management and oversight to someone with little practical real estate knowledge. Or if that person has an understanding of real estate they often have numerous other corporate responsibilities making real estate a lower priority. Real estate issue do have a day to day operational impact.
In the recent debate over the passage of SB1170 which requires commercial brokers to disclose in writing whether they represented the tenant/buyer or landlord/seller, the Senate Judiciary Committee acknowledged that:
“There is a common misconception that parties involved in commercial real estate transactions are 1) sophisticated; 2) of equal bargaining power; or 3) equally knowledgeable and experienced in real estate as the other party or the brokers involved. This is not always the case. For example, a small business owner whose only real estate transaction over the next five years will be his or her office lease is not going to be as sophisticated as a landlord whose primary business is real estate and who is negotiating multiple leases a year with the help of a team of sophisticated professionals. That business owner is at a severe disadvantage at the bargaining table and should be educated on the duties or limited duties the licensed real estate professionals involved in the transaction owe to all parties.
When we opened IN/House Corporate Real Estate 25 years ago, it was with the idea that most business owners need help. Unless they were one of the 5% of companies that have a full time in-house real estate department, there was a void that needed to be filled. With that in mind, while our goal is to always exclusively represent tenants, the objective is to be the defacto in-house real estate department for our clients who range from small firms with 1-5 employees to larger companies with multiple locations regionally and nationally.
The common thread is that whenever our clients have a real estate issue, we are their first call, and at no additional cost.
You can always use help. Who do you call?