- Why Multifamily Rents are Holding Up Better than Expected - June 2, 2020
- Coronavirus Dents Multifamily Development - May 14, 2020
- Connect Features Multifamily Industry Leaders: Multifamily Market Update - May 14, 2020
This month I’m going to offer a two-part series. Both articles will examine the advantages of leveraging the expertise of a commercial broker for commercial real estate transactions. This first article will cover the benefits of a commercial broker from a seller’s perspective; I’ll follow up in part two with a look at the benefits from a buyer’s point of view.
Before we delve into the many reasons why using the services of a commercial broker is a good idea for anyone looking to sell commercial real estate, let me just make a few general comments …
Commercial real estate is truly a specialty. A commercial real estate transaction is a complex undertaking that involves thousands of details and interrelated tasks. It can be very difficult for someone without a thorough knowledge of the commercial real estate business to manage a transaction efficiently and without missing details that would result in unnecessarily wasted time and money. The commercial real estate industry, along with all of the rules and regulations that govern it, is very dynamic. Things can change so quickly that even seasoned professionals can fall behind if they are not diligent about staying current.
I sometimes compare commercial brokers to attorneys. When people (that are not legal professionals) have legal issues, they could try to represent themselves, but it’s not a good idea. Without the vast knowledge and understanding of the minute details that a qualified attorney possesses, there’s a high probability that details could be overlooked and costly mistakes be made. Good attorneys know the most current laws and the smartest strategies and tactics for addressing legal issues. An attorney is an expert consultant for legal issues, and a commercial real estate broker is an expert consultant for real estate transactions.
A commercial broker can represent buyers, sellers, landlords and tenants. So let’s take a look at what a broker can do for sellers.
One of the most important benefits that a reputable broker offers a seller is effective marketing. Obviously, when sellers list properties, they need to get the word out to viable buyer prospects. This is how they reach the best prospects and they get the best price for the property. Unlike most property owners, quality brokers have a wide variety of marketing tools and resources at their disposal and the expertise to use those tools to maximize the exposure of the property to the target audience most likely to be interested in buying. Because a broker has these tools in place and uses them often, he or she will be able to run each marketing campaign efficiently and cost effectively. Marketing for-sale properties is something most brokers do practically every day, so the process usually runs like a well-oiled machine. Once the seller submits the details of the property, the broker will have it in the MLS system, on multiple internet real estate sites, and in all the right print publications almost immediately. In most cases, signs, flyers, email blasts, direct mail and other communications channels will also be used to enhance the campaign. In addition to the standard marketing channels, if a broker has been working in the area for an extended period of time, he or she has probably built up a network of relationships with clients, investors and other brokers that will result in some excellent leads.
An experienced broker may also have the talent and ability to look at the property from different perspectives and recognize variables that the owner didn’t notice. A broker can frequently help the seller identify the highest potential for the property based on factors such as location, square footage, property type and more. For example, a property near the hospital may have the most value as a medical facility. A building near the courthouse may be ideal for an attorney’s office. A specific example in Wilmington is on the corner of Oleander Drive and Independence Boulevard. Remember the old Exxon station? Today it’s a thriving Starbucks. It’s on the corner of a busy, high-visibility intersection that’s easily accessible from either side, and near business and residential areas – it’s the perfect spot for a Starbucks.
Proactive commercial real estate brokers also will offer sellers ideas about the best way to utilize their properties. Understanding the variety of ways a particular property can be split or subdivided can expand the appeal of the property to a broader audience. A good broker will run scores of analytics to determine the true value of the property for a range of business scenarios, and then find the appropriate target buyers.
The bottom line is, a commercial real estate broker is a specialist that has the tools, knowledge and connections to help sellers locate buyers efficiently and cost effectively.