If you are looking to buy, sell or lease any type of commercial real estate chances are you’ve already been told that you should hire a professional commercial broker for the transaction. Much like you wouldn’t file taxes without the help of a CPA or design a house without an Architect, in order to protect your best interests and get the highest return on your investment, you should always engage a Broker for any and all commercial real estate transactions.
Although hiring a commercial broker makes sense to us (obviously), there are many people who still try to buy, sell or lease real estate on their own. In our experience, gained from executing hundreds of commercial transactions, the reason that people initially choose not to work with a commercial real estate broker is because they simply do not understand exactly what it is that we do. Below we provide a high-level look at the services a broker provides and what types of relationships they have with their clients.
Commercial Broker Services
It is simplest form a commercial real estate Broker is an expert in the field of real estate and its transactions. They assist clients with the purchase, sale or lease of commercial properties that will be used for business purposes. Representing either a buyer, seller or tenant a broker serves as a mediator between parties, ensuring that their client receives the best terms, conditions and value on their investment transaction.
These brokers assist clients in finding and purchasing commercial real estate properties, including performing an exhaustive search on member only listing platforms to find any and all appropriate properties and negotiating optimal purchase price and terms for their client.
A commercial real estate broker assists clients in selling commercial real estate assets, including performing extensive market analysis to set an optimal listing price, executing advanced marketing tactics to find qualified buyers and negotiating sale terms for the highest return.
A commercial broker assists landlords and tenants with the lease of commercial real estate space, including establishing lease rates, finding qualified tenants, finding quality space, and negotiating lease terms for either party.
Commercial Broker Relationships
When handling acquisitions, dispositions and leasing transactions a commercial broker will be serving in one of three capacities: a Listing Agent, a Tenant Representative or serving both. Below we outline the specificities of each of these relationship types.
As a listing agent a commercial broker works for a landlord/owner and looks out for their best interests in the sale or lease of their commercial real estate assets. In this relationship the broker is the landlord/owner’s agent and, as such, negotiates all terms, performs all responsibilities and ensures all outcomes are most favorable to the landlord/owner.
The broker is responsible for finding appropriate and qualified tenants or buyers and when they execute a sale or lease they are paid a commission by the landlord/owner (typically 3% to 6% of the final sale price or the total rent for the term of the lease). If another broker brings in a buyer or tenant the two brokers will typically split the commission 50/50.
Often time’s tenants looking for space will seek out a Broker who works exclusively for them. Rather than looking out for the best interests of the landlord, a commercial broker who serves as a Tenant Rep is duty-bound to ensure their tenant client gets the best deal on the best space possible. The main advantage of Tenant Reps is their talent for negotiation, establishing the most favorable lease terms and rental rates while also ensuring there are no hidden clauses, charges or financial responsibilities on the tenant.
You will find that most brokers work on transactions that serve both landlord/owners and tenants interests. In this capacity a broker serves as an intermediary helping both owners and tenants find and buy/sell/lease space.
Looking for a Commercial Broker in Melbourne, FL?
Hopefully we have cleared up what it is we do as commercial brokers, and also convinced you (if we needed to) that you should never buy, sell or lease a commercial asset without one. If you are in the market for space, or simply want to know your options, reach out to one of our CRE specialists! We have some of the market’s most professional, knowledgeable and hard-working Brokers on our team who can help you at any point in the investment process.