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Why Using A Broker When Buying A Commercial Property Is A Good Idea

making a deal with a commercial real estate broker

Commercial real estate may be one of the best investments you ever make. Whether you’ve successfully built your small business from the ground up or you’re just starting out, a question you need to answer may surface eventually: Should you purchase property for your business? Buying commercial real estate can be very complex, even for insider pros. It’s not the same as buying a home. It takes time, research and planning. Owning commercial property is also a decision that must be weighed very carefully, and each scenario is different for every business. But in the right circumstances, it can be a wise investment, and the potential rewards can be great

So now that you’re considering investing in commercial real estate, your next question is probably whether or not you should use a broker. As you weigh out the pros and cons of your particular situation, make sure you keep some of the following points in mind.

Have Someone On Your Side

Listing agents are duty-bound to protect the landlord’s interests. If company managers only works with listing agents, they must rely on their own wits to protect the company’s interests. This creates a decided disadvantage at the negotiations table, as only the landlord is represented by professionals familiar with the process.

A tenant agent will work for your company’s interests at every stage of the process. They can more disinterestedly search for properties listed with many brokerages and can take into account your company’s situation and needs, rather than working to fill a building at the best price for the landlord.

Time Is Money

Without a broker, the list of properties available and their favorability with respect to your business’s best market location can seem overwhelming. The broker brings experience and a solid understanding of markets in your metropolitan area, and can help eliminate office space that is not ideal for what you do.

In addition to avoiding the heavy investment of time just to find the property, time savings can be realized as the deal progresses, in organizing inspections, negotiating and re-negotiating terms, completing plenty of paperwork, and making offers. Because the broker has experience and connections, the search for a property, as well as the completion of all the contingent steps to signing the lease can be streamlined.

Knowledge Is Power

Real estate brokerages pride themselves on knowing the local market and can help companies find the most potentially profitable spots for their specific kind of business. An upscale clothing retail company might better be able to pinpoint locations where their kind of merchandise is sought and tap into broker’s data on foot traffic and retail sales in certain areas.

Brokers often know right off the bat which buildings are available, plus any restrictions, zoning, and proposed development the company owner might not be aware of. They are familiar with areas, trends and even local business owners and landlords–all information providing an edge to the client in his or her search for office space.

Brokerages also spend thousands for proprietary reports on market data on sales and leasing, including traffic counts, demographics, and comparable leases and sales. They often are privy to offers not available to the public, like office space set to be made available.

Negotiation Is The Name Of The Game

Successful negotiation can be stressful. A commercial real estate broker negotiates for a living and can provide a buffer between the sometimes rocky process and the client. Negotiations can be complex and it is helpful to have an advocate on your side that can spot hidden charges or profit centers for the landlord.

Leases are legal documents, which no one likes to read–they are confusing and full of jargon that often obscures meaning. A good broker can read and interpret these legal documents and help negotiate lease clauses that could be harmful to the client.



About the Author

Chris Falk SIOR, CCIM

Chris Falk is a Certified Commercial Investment Member (CCIM)—one of the most comprehensive commercial real estate designations, held by an estimated 6% of commercial brokers nationally. As a commercial real estate broker, Chris has handled over 600 transactions exceeding $475MM. Born and raised in Utah, Chris understands the unique qualities of the region and the great capacity for business opportunities in Northern Utah, including Davis, Weber and Salt Lake Counties. Chris is the premier, go-to agent for businesses and developers interested in this dynamic area.