Selecting a Commercial Real Estate Broker
What are the benefits to hiring a real estate broker?
The primary reason to choose outside representation in real estate transactions can be summed up with one word: experience. A broker’s daily involvement with the various stages of the lease transaction process provides a level of experience that most tenants lack. While a tenant typically reviews space options once every five to ten years, brokers are involved in this process on a daily basis.

Below are key points detailing a broker’s value-added role:
  1. A qualified broker is a strategic partner that fully understands how real estate decisions impact business growth. His/her primary task is to judiciously advise clients on the potential gains and challenges of site selection, expansion, consolidation, as well as the optimal financing conditions for each growth phase.
  2. Market knowledge is a broker’s strongest asset. Specifically, a broker will have the most current information on competitive rental rates, deal structures and comparable lease transactions. Also significant will be a broker’s knowledge of current market trends, for example, the pros and cons of opting for an open-concept layout versus traditional office and cubicle space, or leasing at a downtown location versus the suburban markets.
  3. Participation in established professional associations and networks allows a broker to effectively navigate all phases of the real estate transaction process. Strong business relationships with landlords and sellers further facilitates strategic real estate negotiations on a client’s behalf.
  4. Information technology advances have dramatically transformed all aspects of real estate marketing and research. Maximizing the use of these tools allows a broker to comprehensively analyze the market on both a macro- and micro-level, as well as strategically direct marketing efforts to effectively canvass designated trade areas.

What criteria should be applied in selecting a broker?
As with any product or service, a solid brand name buys the reassurance that a real estate broker has successfully represented many business clients. Choose a broker who has gained the respect of clients and peers alike, based on a proven track record and an established reputation for excellence.

It is important to keep in mind your specific business requirements, however, since a brand that works for others may not work for you. Once you have narrowed your search, be prepared to invest the necessary time to ascertain your level of trust with each professional broker on your short list. The fiduciary legal and financial nature of the broker-client relationship demands you pursue only those brokers with whom you foresee a strong and lasting relationship based on trust, open communication, as well as an affinity or likeability factor.

Three remaining traits are key indicators of a broker’s future performance: superior customer service, “open-book” policy and information-sharing.

A broker’s superior customer service as measured by excellent response time—with you and business prospects—is crucial to the success of your project. Look for multiple access avenues—telephone, cellular, e-mail, fax—as well as a back-up system that includes a broker’s associates and/or support staff.

Today’s real estate clients are sophisticated and engaged participants that bring a crucial perspective to the transaction process. A broker should at all times be willing to open his/her “books” to keep clients abreast of all activities performed on their behalf. Clients should expect a broker to provide timelines and regular updates on all marketing and brokerage activities, as well as consistent updates on all strategic planning meetings.

One of the primary reasons for choosing to be represented by a broker has to do with levels of experience and expertise in real estate matters. In the process of being represented, however, you should expect to become more educated about commercial real estate, particularly how it pertains to your specific project. Brokers should be able to provide market research information including: project analysis vis-à-vis the immediate market trade area, as well as the overall market; analysis of key market trends; and analysis of historical market performance.

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