Why use a commercial real estate broker ?

[Houston Office Space]

March 04, 2009
Why use a commercial real estate broker?

We frequently speak with tenants who are interested in obtaining
information regarding a commercial property and who have expressed
difficulty in getting a return call when attempting to gather market
research. Tenants (companies) that are not working with a broker will
call on leasing signs posted in front of a building. What the tenant
might not realize is that the building's leasing agent at times is not
in a hurry to return the call sometimes due to the size of their
requirement or that the space advertised as being available for lease
actually is not available at all. Typically, the leasing sign will
remain in front of a building regardless of whether or not space is
available. We also have found tenants get exhausted spending time
conducting research on Web sites that contain only listings belonging
to one landlord or Web sites that are paid-advertisement directories
that contain very limited or outdated listing information.

Presenting current market options is one of the most beneficial
services a broker can offer to tenants in addition to evaluating
options when they are faced with renewing an existing lease,
relocating/leasing space in other buildings, and exploring ownership
opportunities such as purchasing a facility. As an added benefit, a
broker familiar with the entire city at times might present options in
other areas to consider that might not be offered in their particular
submarket or existing location.

One important factor to consider when selecting a broker to assist
with leasing space is to select one who is free of any potential
conflicts of interest. In other words, when leasing space it serves a
tenant well to select a broker who is not working for several
landlords as well as (you) the tenant.

Securing a business location is extremely important and typically is
the second highest line item in terms of operating expenses when
operating a business. Many tenants believe that they are able to
handle their company's real estate needs on their own. One example of
how some tenants substantiate their ability to handle their business
real estate affairs is by reflecting upon how many leases they have
successfully negotiated over the years. Lease terms vary and may
extend over a period ranging from one year to 15 years. If a tenant
has negotiated five leases over the course of 15 years, imagine how
many leases a leasing agent working for a landlord has negotiated in
comparison over the course of just a few months. When thinking about
this example it is easy to understand why negotiating on your own
behalf might not be such a good idea.

Every broker over the years develops their own style and technique of
working on assignments and interviewing a broker when making a
decision regarding your commercial real-estate needs is a good first
step. A lot of brokers work for tenants on a commission structure,
which doesn't involve an out-of-pocket fee being paid directly to then
by a company using their services, because it ends up being paid by a
landlord who splits the commission between your agent and his or
simply remains with that landlord and just sweetens the pot for him at
the end of the day.

Additionally, a good broker not only will save a company a lot of time
and money by allowing tenants to concentrate on their core business
during the course of a real-estate transaction, but also will help
save on intangible assets such as the time and effort involved in
successfully closing a commercial real estate transaction.

Theodore Brakatselos is the President of Houston Site Acquisitions, a
commercial real estate company. He has over 17 years of experience in
commercial real estate and has represented a broad range of tenants
and landlords over his career including star-up companies, publicly
held companies, and overseeing portfolios for institutional landlords
& investors. You can reach Theodore at 713-789-8700. http://www.hsacq.com