IN/House Corporate Real Estate

Why Choose an Exclusive Broker

In speaking with both residential and commercial brokers, both felt their areas of expertise were more dynamic and profitable, It was interesting to hear the perception most residential agents ("Realtors®" if they are a member of the national association) had of commercial brokers. Typically, they described commercial real estate as an unprotected free for all. They were used to working under some type of exclusive agreement while most commercial brokers, particularly those representing tenants, practiced "TRACK SHOE BROKERAGE--find the tenant and run with him. Although one may argue there are advantages for the tenant to working under this type of situation, the reality is an Exclusive Representation Agreement or Exclusive Service Agreement will always serve your best interests.

More Brokers Mean More Properties!

Until the late 80's, only residential agents had the advantage of computer databases such as the Multi Listing Services ("MLS") which provided local area availabilities to all members. For the commercial broker, he/she had to go door to door to find out such information as lease termination, square footage, or building information. For that reason, most commercial brokers specialized in a specific type of product (office, industrial, retail) and mapped all product within a specific geographic area. However, in today's market, most all metropolitan areas are served by either such national database firms as Co-Star who provides local market information or one of many smaller local companies throughout the US.

The idea that having more brokers helping you locate a property means you will be able to find that unknown space is a thing of the past. Most all brokers use the same computer database with terminals at their desk. If it's there, any broker can find it. FINDING THE RIGHT SPACE IS THE KEY!

Advantages of Using One Broker

1. If your broker is simply a tour guide to show you the market, pick anyone! If your broker is to have your interests in mind and not his agenda (that commission thing) the simple fact is he needs to know he's working for you and that his efforts will be rewarded.
2. If your broker is under contract, he can "advertise" your requirement. Although 99% of the availabilities in most larger markets are listed on the computer services, by advertising your requirement to the entire real estate community, he can focus more specifically on YOUR requirement rather than generalizing. Remember - the job of a listing broker is to lease or sell his principal's property as quickly as possible at an acceptable rate or price. It they were to receive your broker's inquiry, it would be to their best interest to go through every listing they had to see if there was a match. Shame on the broker how holds back that information. Imagine what his principal would say knowing you leased the space next door because his broker didn't respond to your broker's request!!! Without an agreement, no broker would expose his "client." Why, so another broker can show you a space he already knows about?
   EDITORIAL - STORY TIME - Once in Ten Years - After spending several months planning a client's facility, locating the perfect space, negotiating a great deal, and even negotiating a most favorable lease, we got a call for the firm's VP. It seems the president got a call from a broker friend of his who heard they were in the market. DUH! The broker had heard from us when we called about another property he had listed. He convinced the president that they should be in a building 15 miles out of their designated area, cost 25% more, and was 50% larger! The Premises was no secret-it was not only on every database. We had been looking at the very space for another client. The CFO was in a panic because of cost overruns! Employees were mad because they are too far from home! The only person who was happy was the broker who was looking at his big commission. While the VP who signed the agreement understood what was going on, the President seemed stuck in the 60's; "whichever broker shows me the space, I go with him." To him a broker is just a tour guide. Sad commentary.
3. The landlord knows whom he's working with. It wasn't uncommon years ago for landlords to get two or three proposals for the same tenant because that tenant chose to go the "open market route." Worse than that, offers that were not always authorized by the tenant yet often showed up on the landlord's desk. If the broker got a positive response, he would go to the tenant with a sales-pitch of, "look what I can get for you". Dirty, but it often worked.
4. Your broker becomes part of your management team. Should you have real estate questions throughout your tenancy, he will be there to help, often at no additional cost to you. It's called a RELATIONSHIP, just like you have with your clients. If you only hear from your broker on one form or another every five years, look for another broker.