By Tom van Betten
Cassidy Turley BRE Commercial
Finding the Right Commercial Real Estate Broker
Many business owners or executives face the daunting task of determining the right tenant representative as their lease expiration approaches. In most cases, these decisions occur once every few years and many decision makers do not have a defined process for choosing the right person for the job. Unlike many other service providers, tenant representatives provide their services at no direct cost to the client and as a result there is no easy way to choose a provider based on a cost comparison.
In today’s digital environment, many brokers utilize “warm introductions” through social networking sites or other influential contacts such as CPA’s and attorneys. Others have junior professionals make “cold calls,” playing the numbers game and hoping to perfectly time their call to when the lease makes the CFO’s agenda. It is only the larger or more sophisticated companies that regularly schedule interviews prior to choosing a representative, as they typically send out request for proposals (RFP’s) before making a decision.
The average San Diego tenant seems to regularly skip this interview process, and it is typically because they are not sure of the appropriate questions to ask. The busy schedules of today’s executives make it tempting or even convenient to just accept a referral or well-timed cold call with no further due diligence. After 20 years of experience representing tenants and being involved in over a thousand leases, I highly recommend interviewing at least three to four firms for the opportunity to represent your company in lease negotiations. In doing so, here are the top themes to address:
• Trust & Advocacy - The cornerstone of this interview is to determine if you can fully trust this person or team. Their strategy and execution of negotiations can have a substantial effect on the success of the transaction, and therefore your bottom line. This is, of course, easier to determine if in fact it was a referral, but ask the referrer about their relationship with the person; have they done business together or were they simply asked for an introduction? Conflicts are an inherent part of commercial brokerage, as typically the landlord compensates the tenant’s broker. Therefore, ask the simple question: does the candidate have any other conflicts, such as other tenant clients that may be competing for the same space?
• Previous Experience - Many times the best salesperson can win you over by having a “silver tongue” in the interview. But do they have the relevant experience to do the best job once they leave your conference room? Ask if they have done any recent transactions in the types of buildings you are focused on, or in your current building. Ask for relevant case studies and creative solutions executed in recent transactions. Ask how long they have been in the business, as there is no substitute for transaction experience in tenant representation.