Saturday, January 25, 2014

The Holy Grail, VIDEO, #CRE ass kicking avoided!

Wow! I marvel at the video technology that we have at our finger tips! What once required a camera crew, with a canopy of lights, was now in my client's breast pocket...his smart phone.

As a disclaimer, I provide Location Advice to owners and occupants of industrial buildings in southern California...AKA, I sell and lease commercial real estate for a living, and have since 1984.

So, on to how video saved my #CRE deal...but first a bit of background on why my #CRE deal needed saving.

Yesterday, I was touring space, with an out of state client, who was in SoCal (for the third time in the past year). The purpose of my client's visit this time... locating a manufacturing building for his company's next week! Should be a no brainer...right?

Yesterday was our third day of touring (on this trip)...a headache for both of us...and frankly, things were not going as expected...I was getting my ass kicked! 

My client hated everything I showed him.

The top top choice from one of our previous tours, in October 2013, had been leased. This "holy grail" of industrial buildings was lost because my client procrastinated...despite my careful prodding.

My client was still "in love" with the "holy grail" and was kicking himself (as well as my ass) for not leasing the "holy grail" in October 2013.

Because, he compared each new building we saw on this trip to the "holy grail", I was scrambling to keep him focused on the good choices this trip.

We ALL know what was coming...blame the dumb broker! 

It could go something like this: The broker is not showing us everything, he doesn't understand our requirement, maybe we should seek other advice, are we locating in the correct western state?...blah, blah, blah.

I believed, despite my client's objections, that one or two of the buildings we had toured the day before would work...but, my client wasn't feeling it. So, here is what I did....which saved my #CRE deal.

We pulled up in front a building that we had seen the previous day. My belief was that every amenity that my client's company required was present: square footage, freestanding, right location, correct amount of power, secured fenced outside storage, and fairly priced.

We started walking through the building (BTW, he didn't remember seeing the building the day before). I posed a question. "Why did you eliminate this building from consideration?" My client couldn't remember.  We reviewed the amenities. My client started to get it. 

But here is where video technology sealed the deal. My client said to me, "I'm going to take a few photos" and whipped out his IPhone 5 from his breast pocket. I responded, "may I borrow your phone?" My client handed me his phone and I proceeded to video record a virtual tour of the building for him to review later.

What happened next surprised me.

My client WAS BLOWN AWAY! He looked at the video again and again while standing in the parking lot. The wheels started to turn. On the spot, my client forwarded the video clip to the company's president in Italy. client's phone rang. The call was from the Italian president...who, after receiving the video, called my client back immediately...even though it was after 9:00 PM (on a Friday night) in Italy. My client had found a new "holy grail"!

My client said to me...after concluding a lengthy phone conversation with the president in Italian, "may we grab lunch and discuss making a proposal on this building?"...ahhh helz yeah!  BTW, I don't speak Italian, but I heard the word "bella" repeated...a lot.

The proposal was drafted, submitted, and we are awaiting a response.

So, if a picture is worth a thousand words, what must a video be worth? the least a closed commercial real estate deal!

Saturday, January 18, 2014

Five #CRE secrets...your broker won't tell you

I want to broach a subject today which is painful for me...the five things most commercial real estate brokers won't tell you. 

The reason this subject is painful is because I LOVE our industry...most everything about it...the people, the pace, the financial rewards, the freedom and flexibility...and most of all...helping business owners achieve their dreams with commercial real estate.

However, I have we all have... some practices that are scary and self serving which I will discuss below.

As a disclaimer, I provide location advice to owners and occupants of industrial buildings in Southern California...AKA, I sell and lease commercial real estate for a living and have since 1984. I have dealt with hundreds of CRE practioners, trained new associates, and operated within the industry for thirty years...there is some expertise bubbling below the surface that I want to un-cork.

In a Letterman-tonian goes!

I believe you could avoid a move if you did a few things differently: We are paid to move companies and fill spaces or through companies relocating into those spaces. I wrote about this last week...moving is expensive, disruptive and rarely achieves the efficiency that is sought. Do you and your client a favor...discuss ways that a move can be AVOIDED...first...before striking out to find a new location.

 I don't believe that buying a building is in your company's best interest: $$$ Dollar signs cloud our judgement here! We make so much more selling vs leasing. If someone tells us that they want to buy...very few of us will challenge that desire...even if we know that buying might be counter productive.

 I have not fully researched a building before we tour: This drives me CRAZY! So many in our industry will not preview a location before touring...maybe because of the above? got me, they will not discuss the owner's motivation with the listing broker, will not check on zoning, etc. An inordinate amount of time is wasted! Hint: Don't take a client through a building that you have not will save yourself a lot of agony and improve your professionalism.

I have made touring your property as difficult as possible: Vacant buildings used to be sooo easy to tour...we all had a lock box key that fit the standard lock box and our industry used the lox boxes universally. If you could not reach the listing broker, you could simply drive by the building...if it was vacant, the likelihood was high that a lock box was on the front door...bitchin! You could preview, take your client through...all very painlessly. The world has changed! We now must call for touring instructions...which vary by broker. Many listing brokers insist upon meeting us at the building to preview and to tour...a royal pain in the ass! NET, NET cooperation is discouraged. Hint: Candidly, the opposite approach should be taken...MAKE IT EASY!...your owners will benefit!

Your property is dramatically over priced: Some CRE brokers will inflate the asking price of a listing! Shock..the horror, the humanities! This practice probably bugs me the most...I get that we want to achieve the most $$$ for our owners...but that 1960s vintage, low clear, under powered piece of junk worth more than a class A, beautifully appointed, well located alternative...c'mon.
Hint: Level with your owner. Explain that his expectations are out of line with the market and that a higher than reasonable asking price will actually deter any interest and cause the property to sit...maybe for months.

OK...rant rage over. You get the idea. Please do us all a favor... don't be that guy...

Friday, January 10, 2014

Moving sucks!...and 3 #CRE MUSTS

Ahhhh, my first blog post of 2014! As I sit here in the world HQ of Location Advice on the 57th anniversary of my birth...thanks Mom and Dad...I have come to two only need to do three things to make a commercial real estate deal AND moving sucks! OK, I said it...not in the colorful way that my buddy Duke Long would say it...but said it nonetheless.

As a disclaimer, I provide Location Advice to owners and occupants of industrial buildings in Southern California...AKA I sell and lease commercial real estate for a living...AKA I MOVE COMPANIES and am paid handsomely when I do so. For me to say that moving sucks is a bit counter intuitive...wouldn't you say? But, it must be said and believed in order to provide the very best advice to your occupant.

OK, so here is what I realized...more specifically.

You only need to do three things to make a commercial real estate with control, work with the decision maker, and set realistic expectations...that is it! Simple right?...but FAR from easy.

Working with control: One of the early lessons I learned in the biz was to work with an engagement agreement...after a guy made a move without me on a building that I showed him...we've ALL been there. Our tendency is not to ask for the control because we believe that we have not earned the right to ask. If you believe that working with one exclusive broker is in the client's best interest and can clearly explain the will not be disappointed...or worse, left at the altar with your ____ hanging out. BTW, control doesn't guarantee success...and working without control doesn't guarantee failure...control just allows you to do a better job for your client.

Working with the decision maker: If there is one reason...above all the others...that will crater a deal; it is not working with the decision maker. You may be thinking...OK, but I do corporate services and there are multiple decision makers...OR the decision maker is 1000 miles away...OR the decision maker asked that I work with her CFO...OR you fill in the reason...Just sayin'. Any time you vary from this rule, you increase the likelihood of a train wreck...AKA your deal explodes and your fee vaporizes.

Setting realistic expectations: Also known as "qualifying", this is where a real pro will trounce his competition. Understand the landscape...Why are you moving, what have you seen, who have you worked with, have you considered purchasing, why do you want to purchase, have you spoken with a lender, do you know exactly how many square feet you need, have you spoken to your landlord about an this an alternative...etc. AND, here are the market conditions, here is what is available, here are the most recent deals, here is a cheaper area you could consider, others in your industry have considered xyz, etc. AND segue to "oh by the way...moving sucks and you should avoid it wherever possible...and make it a last resort...

Now to the moving sucks part. Moving is expensive, disruptive, and only rarely creates a better efficiency...yet companies do it...every day! Why? Refresh yourself on my post entitled the five reasons companies relocate. My point is this...there are reasons that clearly motivate a move but it is incumbent upon us as professionals to think "anti move"...because this may be what is best for our clients. Believe me, if you don't deliver this message clearly (moving sucks...maybe a more PC version), the occupant will figure it out...and maybe to the deal's detriment. If your client is out of space, there are several things that can be done to avoid a here for those. Cover these and make lots of friends. You may not get paid...but you are paying it forward...much greater!

Let's level with our clients and make it a great 2014 y'all!