How To Toolbox: How to choose a commercial real estate broker

July 19, 2011, 2:22 pm

Think of them as an advisor It may be easy to think of a real estate broker as just someone trying to sell you something, making a property owner rich at the same time. But those in the industry note that a broker can be much more for a young company that doesn’t have its own real estate department and needs ongoing advice as much as it needs the key to the front door. Here are some bits of wisdom from local real estate firms: A well designed process for selecting a commercial real estate broker should first and foremost emphasize the selection of a trusted advisor. Given the material size of real estate expense to most organizations, a company should require the same level of integrity and industry expertise that is expected of other trusted service providers, such as attorneys or bankers. You should expect reliable, complete information from a firm that expertly interprets and professionally communicates all financial and non-financial elements of the real estate process. — Chris McCauley, senior vice president, Richards Barry Joyce & Partners Since trust is earned over time, and a company faced with such a selection may not have the luxury of an existing relationship, we recommend a procurement process that prioritizes (1) geographic and (2) asset (e.g. office, industrial or laboratory) expertise. These credentials must be supported by rigorous qualitative feedback from formal and informal references. — McCauley Learn about the players — meet with multiple firms. Understand different offerings/approaches; hear multiple opinions/perspectives on current market conditions, trends, forecasts, etc. Trust is critical, so it’s very possible your advisor will come from your personal network or via a referral. That being said, it’s important to understand how different groups approach the business and real estate process to ensure your company is properly aligned with its advisor. — Daniel R. Kollar, vice president, Jones Lang LaSalle Understand the team and platform. Team: Look at their experience (years in the business) and market knowledge (transaction volume and velocity in the target geographies). Look at their platform: Do they offer access to additional resources/service lines if needed (project management, construction, property management, corporate finance, etc.). There is no limit to the twists and turns a deal can take in the course of the transaction process; it is essential to have a team and a platform that are equipped to address these issues immediately and comprehensively. — Kollar Explore the best fit — seek a partnership. Your real estate advisor is an extension of your company and as such, should work hard to understand your business, culture and objectives. Overlay the culture and values of your company with theirs. Seek a true partnership whereby both groups can help each other grow and achieve their respective goals (For example, asking advisors to connect you with other clients whom you may also be targeting). — Kollar Ensure that your broker has ample experience in your specific submarket. Each submarket has unique characteristics and often times entirely different landlords than adjacent markets. Relevant submarket experience will increase the likelihood that your broker can leverage existing relationships to your benefit. — McCauley

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