Do I need an exclusively commercial broker to handle my property listing?
It’s a common question that arises when someone who rarely deals with commercial property has a one-off buy or sell transaction to deal with, and it’s a reasonable thought to ponder! You may even have a real estate friend who sells houses that you trust, who says they can handle the commercial listing.
Unfortunately, clients that go with a residential, or “resi-mercial” agent often end up frustrated, poorly marketed, underserved in the negotiation and transaction process, and possibly even with a damaged friendship. Commercial real estate brokers will tell you many of their clients come to them after having tried to sell the property with a residential agent that was a friend or relative.
While it’s understandably tempting to hire someone you know, when it comes to commercial property, it is crucial to have the right expertise and guidance to navigate through the challenges successfully. This is where an exclusively commercial real estate broker comes into play. Unlike residential real estate brokers who deal with residential properties such as homes and apartments, exclusively commercial real estate brokers specialize in commercial properties such as office buildings, warehouses, retail spaces, and industrial facilities. Here are some reasons why hiring an exclusively commercial real estate broker can be beneficial when buying or selling commercial real estate.
1. In-depth Knowledge of the Commercial Real Estate Market
Commercial real estate brokers have extensive knowledge of the commercial real estate market, including current trends, market values, and opportunities. They can provide valuable insights on various factors that can affect the value of a property, such as location, accessibility, zoning regulations, and environmental issues. Ask your commercial broker if they are also a commercial real estate property owner. There’s a good chance they may own a portfolio locally themselves, and may even be able to go deeper in assisting you understand local market trends, CAP rates, approval processes, and regionally specific expenses and external factors at an incredibly high level. The value of a local broker who knows their local commercial market cannot be understated!
2. Access to Exclusive Listings, Listing Platforms, and Buyers
Exclusively commercial real estate brokers have access to exclusive property listings, and commercial listing platforms, that are not available to the general public. This gives buyers and sellers a competitive advantage by having access to a wider range of properties, and property exposure, through the commercial agents network and paid marketing channels. While a residential agent will likely focus conversation around the MLS, a commercial broker is going to focus on other paid exposure platforms like Co-Star and LoopNet, which are designed exclusively for commercial property. Beyond marketing platforms and paid channels, your commercial broker should also have higher level access to commercial real estate buyers and sellers, through local networking, day to day transactions, and relationships with other commercial brokers locally. This is a huge advantage in getting the exposure you need.
3. Expert Negotiation Skills
Commercial real estate transactions involve complex negotiations that require both commercial expertise and experience. An exclusively commercial real estate broker has the skills and knowledge to negotiate favorable terms for their clients, including price, lease terms, and other conditions that can impact the transaction’s success. It’s important to note that these negotiations are incredibly different than those that occur in buying or selling a house. Your commercial broker should understand zoning regulations, approval processes, due diligence requirements specific to the property and the project, and much more. Negotiations vary widely on commercial deals depending on the project and the asset class. Your broker needs to be knowledgeable and confident in their ability to navigate the needs for your specific commercial project.
4. Comprehensive Due Diligence
For buyers, by identifying potential risks and liabilities, a commercial broker who understands due diligence can provide valuable support to their clients. They can investigate the property’s legal, financial, and physical aspects to provide confidence that the buyer is aware of any potential issues that could affect the property’s value, use, or future development. With their expertise, they can streamline the process by coordinating and introducing various professionals and ensuring that all legal and financial obligations are met. On the flip side, a commercial broker representing a seller should understand what the buyer’s team is navigating on a high level, and where to push and pull the negotiation based on their understanding of all the variables.
5. Professional Network
Commercial real estate brokers have a vast network of professionals, including lawyers, appraisers, inspectors, and commercial lenders, who can provide valuable support throughout the transaction process. This network can help streamline the process, reduce risks, and ensure that all aspects of the transaction are handled professionally and efficiently.
In conclusion, commercial real estate transactions can be complex and challenging, requiring expertise and experience to navigate successfully. An exclusively commercial real estate broker can provide invaluable guidance and support, from finding the right property, to negotiating favorable terms and conducting due diligence.
Therefore, while it might be incredibly tempting to hire that residential agent you know and trust, hiring an exclusively commercial real estate broker can be a wise investment, that will undoubtedly lead to a more successful transaction and more favorable overall outcome.
