Why use a Tenant Representative?

With real estate characteristically being a business’s largest expense, companies can’t afford to overlook the benefits of professional tenant representation services when thousands of dollars are ultimately at stake. Locating spaces or property available that suit your company's needs can be both a waste of your time and expensive.

Ok so I'm stealing my idea from Letterman a bit, but hopefully since we're both Hoosier's I hope he'd give me a pass on this one. So here are the top ten signs you've hired the wrong broker to be your tenant rep....

10. When you ask him/her about the conditions in the marketplace, they check the DOW average for you

9. While on a tour, the broker seems to only show properties with their sign in front

8. They ask you if you are interested in selling your home also

7. The agent picks you up in a Taxi Cab and they are the one driving

6. When you ask about comps in the area they direct you to the Horseshoe Casino

5. You forget that the agent is in the room when talking with the building owner/other agent

4. When strategizing about an offer, he/she directs you to the lucky dartboard.

3. The size of the spaces you see couldn't even fit your reception area

2. The size of the spaces you see could fit your space as well as your whole parking lot

and the number one sign you've hired the Wrong Broker.....

1. Your representative and the building owner have a secret handshake

Ok so maybe some of those were a stretch but there are some truths to each of these points. When it comes to negotiating a lease there is no question a good rep will save you time, money, but also save you from making any critical mistakes. Not to mention this is typically a free service. Typically, what happens is that the fee, is already built into the quoted rent. Therefore, the commission is split between the tenant rep and the listing agent. There really is no additional fee tacked onto the lease rate and you won't save anything by not having a rep. In the case there is not another broker then the listing agent gets the whole commission.

If any of the Top 10 sounds like your agent....then good luck with that!

Posted: 3/1/2010

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2010 and Banking

So many topics to talk about for a first blog I figured I would talk about the lending industry. So in the words of Jerry Maquire ”Well, don’t worry! I’m not going to do what you think I’m going to do, which is FLIP OUT!” I mean who could blame just the banks when there are so many others that played key roles in this recession (are we allowed to say that word?). We had Freddie and Fannie out there saying we want more loans given to those that didn’t deserve them in the first place. We had developers building retail centers on letters of intent that were probably worth less than the paper they were printed on. We had commercial realtors convincing buyers that yes it’s a 6% cap rate now, but man that thing’s going to be a 4% cap rate in 5 years. But that’s not what we want to talk about now is it!

The banks take a lot of heat for this mess somewhat rightfully so. It doesn’t make it any easier when we give out “stimulus money” only to hear about huge bonuses being paid to executives. Goldman Sachs had to go so far as to have bomb sniffing dogs and police barricades at their headquarters before an earnings announcement. Here’s a tip if you have to go so far as to hire bomb sniffing dogs you may be doing something to piss people off.

Now I know the banks aren’t in the business of making people happy, and maybe we don’t care as much about them as our parents did. I mean I probably has as much loyalty to my personal bank as they do to me. If I were to have a problem I would have to talk to 3 different people and maybe one from India to get my internet banking issue resolved.

What’s the answer? Does anyone really know. We can go from an idea, to a 60,000 square foot building built to suit that idea in less than 6 months if pushed. So banks to have to compete at a speed that makes it tough to fully analyze the right decision to make. The smart banks are the ones realizing there are opportunities to make. Maybe we should loan more money to those that have been good to us by making the payments on time. I have a very successful client that purchased a vacant piece of ground and paid cash for the land. He went to get a construction loan on the property only for them to ask for 50% down on the loan. For those of you that don’t know much about commercial lending that’s a bit much! 3 years ago the same client and bank for a vacant piece of ground, the loan was based on 3 non-binding letters of intent from tenants, and he got a 80% Loan to Value on the ENTIRE loan package which included the purchase of the ground and the construction loan.

OK one more entertainment quote this time from Katy Perry “Cause you’re hot then you’re cold, you’re yes then you’re no, you’re in then you’re out, you’re up then you’re down.” I have the answer and it may be a bit crazy but how about consistency? Don’t buck to the latest trend to compete with the new CMBS down the street offering 90% LTV on a spec office building in a spec housing market community. Figure out what you’re good at and stick to it. Realize that the money you’re hording like Scrooge McDuck can be reinvested to credit worthy investors. That means without asking for DNA samples, promissory notes from their grandchildren, and the first right on a liver should it go bad. Ok, maybe that was a bit much.

The point being is I believe the worst is behind us. 2010 is going to be a much better year as long as we can get that”stimulous money” (still laughing on how well that one worked!) to come out of the banks. I think the adage is buy low sell high, right? So for those hiding your money in the mattress get it out . That means you banks!

Posted: 2/17/2010

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