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...