CRE Brokers Defined

I delivered a presentation to a sales team of material handling specialists last week. Why you may wonder? I would share with you two reasons. First, I’ve transacted nineteen deals with the president since 2009 all over the western United States - we’ve grown together. This was one way of giving back to an organization that’s  been very kind to me. Secondly, we work closely with their sales team in assisting us execute deals. The better they understand our world - we both benefit. 
 
Some of you reading this column are commercial real estate practitioners. Others of you own or lease commercial real estate and pick up tidbits along the way. Still others  may be considering the field as a career or a way to supplement your income. Regardless, of your vantage point, I believe you’ll find value in todays topic. 
 
Let’s center the column on three of the four topics discussed - CRE brokers defined, how we’re paid, why you should care. 
 
CRE brokers defined. Said simply, commercial real estate brokers assist owners and occupants of commercial real estate in finding buyers or tenants for vacant buildings in the case of owners, or finding a place to relocate in the case of occupants. Commercial real estate companies are generally local, regional, national, or global, determined by the reach of their brokerage. These firms service a geography through their network of agents. Additionally, most firms find their agents on either or both sides of the transaction - representing the owner and/or the occupant. “Dual representation” describes an agent on both sides of the deal and is a much larger subject I’ll reserve for another day. However, there are companies who specialize in tenant or buyer rep. As a service provider seeking relationships with us - all of these elements are important to understand. 
 
How we’re paid. Full commission, no salaries or bonuses and only when we transact. Yep. We can spend days, weeks, months or years on initiatives that never pay us. Unlike those with salaries or hourly service providers such as CPAs or attorneys - our profession “eats what it grows” so they say. 
 
So what, you may be wondering. We enter through the C suite in many cases deal with the president, CEO, CFO, or the COO. This gives commercial real estate practitioners a view from the top, as opposed to some service providers who must begin with a warehouse manager, or a purchasing agent. Because we start in the C-Suite, our engagement is recommended from the boss, and in most instances we don’t have to compete.
 
We are the arbiters of change. Generally, the involvement of a commercial real estate broker is preceded by some sort of a transition. Whether it’s a death, a divorce, a massive debt that must be repaid, some distress, a dissolution of a partnership, or a disposition of the company - our job is to assist a company navigating these transitions. 
 
We are upstream from most relocation decisions. By this I mean, we must network with trusted advisers, so that we are in proper position once a transition occurs. Business attorneys, CPAs, commercial, insurance, brokers, investment, bankers, business, bankers, and wealth advisors are all professions. That will see a transaction before we do. But, we are in front of all those that must rely upon a transaction to occur such as contractors, escrow, agents, architects, and the like. 
 
Allen C. Buchanan, SIOR, is a principal with Lee & Associates Commercial Real Estate Services in Orange. He can be reached at abuchanan@lee-associates.com or 714.564.7104. His website is allencbuchanan.blogspot.com.