Commercial Real Estate Encyclopedia

Why Find a Commercial Real Estate Broker?

The commercial real estate market can be competitive, dynamic and difficult to navigate. To overcome these challenges, it takes in depth market knowledge, extensive experience handling real estate transactions, and access to buyers, sellers, properties and tenants to bring it all together.

A commercial real estate agent is there to provide their skills and abilities to represent their client's best interest. The broker's role is to guide their client through the real estate process to the conclusion of a successful real estate transaction so their client does not get distracted from their own business.

The Value of a Commercial Real Estate Agent

Finding the right buyer, tenant, commercial property or space is a time consuming effort. There are many risks along the way that can lead to a missed opportunity. Paying above market rates for rent can lead to an unnecessary long term financial expense. Delays in the transaction process or not finding the right tenant in a timely manner can lead to lost revenue. Not having access to data, expertise, or established relationships can hinder a transaction or negotiation.

There are very real and costly consequences that can arise when faced with finding, negotiating, and completing a commercial real estate transaction. In order to manage the risks and effectively engage in the business of commercial real estate there are a few essential prerequisites.

Market knowledge, experience and insight is the first requirement. Market expertise means more than knowing prices, rental rates and available commercial properties or available space for rent on the market. Market expertise also means knowing what buyers, sellers, occupiers and landlords are active, have fallen out, or who may enter the market at any point in time. Knowing what contract terms are flexible and what deal points are negotiable along with good judgement also stem from professional experience and market knowledge. This knowledge comes from being continually engaged in the marketplace.

Access to and relationships with buyers, sellers, landlords and tenants are also critical in the real estate business. Landlords, investors, and developers all maintain relationships with commercial real estate brokers as they need them to bring them tenants and opportunities to acquire other properties. Having existing relationships and an ability to build new ones in the business is part of the job. This means having an extensive and accurate database of qualified candidates, commercial properties, and service providers to reach out to as needed.

The ability to execute and manage the marketing, negotiation, and transaction process is also necessary. These processes need to be customized to the needs of the client and the real estate requirement. These tasks can be time consuming and may require a team of professionals to execute.

It would be difficult for anyone to maintain these capabilities without being engaged in the real estate business on a day to day basis. Even many landlords who are in the commercial real estate business engage commercial real estate brokers to market their properties. With this in mind, tenants should also strive to have the same capabilities or find themselves at a disadvantage.

For these reasons and many more, it is generally advisable to find a commercial real estate broker that will look out for their client's best interest. The right commercial real estate broker augments the capabilities of their clients. Now it's just up to the client to find the right commercial real estate broker that corresponds to their needs.


Real Estate Terms

1. How much cash will be required to make your mortgage payments? Debt Service >>

2. Who can you go to to finance your construction or development project? Construction Lender >>

3. What professional can assist you in maximizing the value of your investment property? Asset Manager >>

4. How can we assess future commitment to infrastructure to support our communities and future development? Capital Improvements Projects >>

5. What measurement indicates if a property's financial performance can cover its debt? DSCR >>

6. What part of a city is the center of urban economic development? CBD >>

7. What allows property owners and professionals to estimate the market value of a commercial property? Comparable Property >>

8. What can landords do to entice prospective tenants? Concession >>

9. What critical factor do stores depend on to drive traffic? Anchor Tenant >>

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