Partner at OMNE Partners 17 years experience in brokerage, development & asset management. Host of Dans on site podcast and YouTube show
Commercial real estate is different from residential real estate in many ways. For the most part, you rarely run into “for sale by owner” listings, and leasing space makes up a large portion of the commercial real estate market. Whether you’re a landlord, tenant, buyer or seller, there are certain things you should expect from your agent. As an agent, when you know what clients expect from you, you’re better able to meet their needs and are more likely to lock in a deal.
Prior to signing a listing, an agent should present you with a market analysis, complete with comparable properties and their asking rents. This will serve as a great guide to determine your asking rents. Along with the market analysis, you should receive a full marketing plan that details how the agent intend to find tenants for your property.
Once an offer to lease is received, your agent should be able to present a full analysis, whether it’s a simple net effective rent analysis or something more complex. Finally, an agent should take a significant role in negotiations. As you would expect, an agent can provide insight on rent, terms or other basic items, but an agent should also provide awareness of market standards on other clauses. Of course, make sure you always refer to your attorney for legal advice.
Many agents will provide you with a list of properties that are available for lease. These listings should be in the form of a full property tour book. A property tour should include a map of the area and properties toured, floor plans, asking rents and additional rents. It may also include demographics, competition maps and other market research, depending on your specific needs. Market knowledge is an obvious requirement for any commercial real estate agent, but finding an agent with knowledge about spaces that will come available prior to them being on the market can be very valuable.
You’ll also want information on comparable deals to know how to negotiate terms and lease clauses. Much like an agent for the landlord, your agent will be a great resource for negotiations. Lastly, an agent will be able to provide you with a list of potential contractors, interior designers, architects and more should you be interested in renovating the space to meet your specific needs.
Many seller expectations are similar to those of a landlord, though there are some key differences. Your agent should have a broker’s opinion of value with comparable properties, what they sold for and when they sold. If you’re selling an investment property, a review of financials and full underwriting should be completed by your agent. Your agent can also be helpful in pushing the buyer along and making sure due diligence issues are resolved. They can also be of service should there be title issues, or at least they can point you in the right direction if they aren’t able to solve the problem themselves.
Similar to a seller, once you have a target property, you will likely want to see comparable sales to determine a fair price. You will also need to know if any deferred maintenance or other work will have to be completed upon closing. An agent can help walk you through both of those items. For an investment property, an agent can help review financials given by the seller and perform underwriting, but they can also be a valuable source of information about the future outlook of the market and what kind of leasing conditions you could face down the road. They will help line up inspections and get the correct people into the property while working with you to stay on track to meet your due diligence timeline.
Any individual listing, lease or sale could bring its own expectations, but these are a good place to start. Knowing your expectations should help you hire the correct agent. Clearly communicating those expectations after you have hired them will contribute to a long-term successful relationship or help you to decide when it’s time to cut bait and look for a new agent. In the end, constant and productive communication will be the greatest asset in helping you achieve your goals.
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