There is a common misconception that real estate brokers are but mere “space finders” for tenants and buyers in the market, and that once the ideal property is located, the search is as good as done. In this do-it-yourself age, with the growth of technology and increased online real estate listings and information, the temptation to go it alone has never been greater. Here are seven reasons that having tenant or buyer representation is in your best interests when you need a new space:
- Information Access. The first thing to know is that a qualified broker has access to more properties than are visible to the public online, no matter how much you Google-search “Alexandria commercial real estate.” While popular with the public, the listing sites LoopNet and Showcase only display properties that the owners’ brokers have specifically paid to advertise, and those visible are estimated to be a small percentage of all available properties.
- Connections. Beyond the internet, your broker will likely know of properties that are not yet on the market or will only be made available to the right buyer (as defined by the owner). This hidden market of properties opens to you when you choose a broker that is well-connected in her or his community. The strength of their network increases your options of properties.
- Focus. Often it is hard for us to know the difference between what we need and what we want. A real estate professional will help you drill down on the characteristics of a property that are most essential to your organization while being mindful of your budget constraints. After carefully defining your requirements, your broker will begin a targeted search for properties that could meet your needs, allowing you to stay focused on your business.
- Breaking Down the Numbers. Obtaining a new space, particularly if it is your first, is likely to bring a few unanticipated and hard-to quantify costs. A broker will help make visible all the costs associated with different properties—utilities, taxes, operating costs, and so forth--so you can make an apples-to-apples comparison of your options.
- Who Pays? Not You. Let’s talk money--the broker’s fee or commission. For those new to the commercial real estate process, there is great news here: you don’t pay your broker’s commission. The landlord, or more specifically the transaction, pays your broker. Your broker gets paid only if and when you sign a contract to lease or buy a property; his or her fees will come from the landlord at the time of the transaction. So, for the renter or buyer, there is no out-of-pocket expense. Knowing that, why wouldn’t you secure the expertise of a professional?
- The Smart Take from the Strong. The task of securing real estate is a perfect example of the challenge of imperfect market information. In real estate, the property owner is much more likely to hold the cards as they have experience and information about local market pricing and conditions. Going into negotiation with less knowledge, as you might be, is just asking to pay more than you need to. A good broker will bring the market knowledge and negotiating experience to bear so you can best play your hand.
- Negotiation. Generally speaking, when we are too invested in the results of a negotiation, the process becomes that much harder and more risky. It is easy to focus tightly on the final price while overlooking the other elements of the deal—e.g. tenant improvements, rent concessions, and timing of payments--that will materially impact the overall worth of the deal to your company. A good broker will fight hard for your interests, know when to push and when to pull, and keep the big picture in front of you as they negotiate for the property you want.
With a qualified broker at your side, you will have access to more properties, and will be armed with experience, market knowledge, and ability to successfully complete the deal that best serves your business.
Mike Porterfield (firstname.lastname@example.org) is president of Tartan Properties Commercial Real Estate Services, an independent real estate brokerage and consulting firm specializing in Alexandria and Arlington commercial real estate. Founded in 1973, this family business handles office, industrial, and retail properties in Northern Virginia, and provides both tenant and landlord representation. To learn more about Tartan Properties, please visit tartanproperties.com. Your inquiries about the local real estate market and individual properties are welcome at (703)836-6558.