Friday, August 9, 2013

"How to" develop profitable relationships with #CRE brokers

I provide Location Advice to owners and occupants of industrial buildings in Southern California.

I previously wrote about all of the economic activity that just one commercial real estate transaction can generate. You can refresh your recollection by clicking here. In heck of a lot of people are employed including, escrow, title, environmental engineers, architects, lenders, contractors, material handling, office furniture, IT, phone systems, moving and storage, security...the list is endless. Let's say that you are in one of these professions, you realize that CRE brokers can be a great referral source for you, and you are unsure how to approach us so that you can be a part of the "mother lode" of referrals. This post is designed to help you forge great relationships with CRE brokers. I will comment in four areas: Who we are, How we are paid, Why you should care, and some easy action items.

Who we are: CRE brokers...notice I said brokers...we are not Realtors (we are not typically a member of the National Association of Realtors)...that is generally a residential designation. Most of us bristle (inside) when we are referred to as Realtors. CRE brokers generally work under a broker's license for a national, regional, local or independent firm. The nationals include CBRE, Cushman and Wakefield, Jones Lang LaSalle, etc. Some of the more renowned regionals (even though some have a national platform) are Lee and Associates, Colliers, Newmark Grubb Frank, etc. The locals and independents vary by geography. Some of the good ones in SoCal are Voit, Daum, and Ashwill Associates. Most of the above are "full service"...meaning we as companies transact ALL types of commercial, industrial, retail, land, and investments. All of the above represent owner's AND occupants...not just occupants as some "tenant rep firms do. The most notable tenant rep firms are DTZ, Studley and Cresa which only represent occupants and take on no owner assignments. Depending on what trade or service you provide, you may benefit in concentrating your efforts on one or more of these companies, specialty, and locale.

How we are paid: No salaries here, ma'am. We are commissioned only, 1099 (most of us), independent contractors who only "eat what we kill". We are paid in one of three ways on the owner or occupant side of the transaction. A move that results in a sale, a move that results in a lease, or a lease renewal...that's it! Our fees are based on a percentage of the consideration (lease rate x square footage x term x % or sale price x %). These fees are generally shared equally by the owner rep's company and the occupant rep's company...and the net fee that flows to the individual practitioner varies by company. I have focused upon the "brokerage" revenue in this illustration with full disclosure that some firms have other revenue sources through property management, construction management, etc.

Why you should care: First, we enter the transaction at the owner or C-level where many service providers or trades deal with individuals far removed from the decision maker. Our referrals are to the boss. Second, we have tons of great data that we will share (once we get to know you) including available buildings, comps, etc. Third, owner's hire us to lease or sell buildings...we are at the leading edge of the transaction. Fourth, occupants hire us to find them buildings to lease or buy and move into. We are at EVERY stage of the transaction when our clients are asking us..."do you know a good_______?" Fifth, we know about other companies that are moving. If we have listings, the marketplace of companies moving around is available to us. Lastly, as my friend James Wilcox of Raymond Handling Solutions so eloquently opined...we are the arbiters of change. Remember, change must occur for us to get paid. We are watching, listening and if successful, arbitrating that change.

Easy next steps: Get to know us... through knowledge of our networks, social media, referrals by another service provider, attending our events, "fishing" where we "fish". Collaborate with us...Invite us to a meeting with one of your clients, introduce us, share our information (including this blog if you are so moved). Do something for us that we can't or won't do...ever offer to pass out fliers of one of our listings to your customers? Good way to do something we can't do. Finally, Learn what we look for and ask for. You can watch this short video if you are curious why companies relocate OR read the post which discusses reasons companies move.

We are real humans just like you. We can't wait to do business with you!