Often times I am asked why someone should have a commercial real estate broker when they are trying to find a new warehouse to occupy. The first thing you should know is that if you are a tenant looking for a warehouse, generally speaking it does not cost you any money to have a tenant rep broker helping you. The landlord will pay the broker, you do not have to worry about paying the broker in most cases. There are several benefits of having a commercial real estate broker or agent. In my opnion the benefits a commercial real estate broker brings are time saving, market knowledge, and real estate experience.
You know what they say, "Time is money!" In my opinon one of the most common things I see when people are out looking for a new warehouse space is that they do not allow themselves enough time to search. The user's lease is coming up at the end of the month and they just began their search process. So what do they do? They begin to drive around and look for signs and call the listing agent. A lot of times, brokers leave their signs out even when the building is occupied to generate sign calls and exposure. So, the user drives around calling on signs and they begin to feel frustrated because there aren't many buildings available. Sure there are sites such as Loopnet and CoStar, however generally these sites do not provide everything that is avialable because brokers have other Multiple Listing Services.
How does a commercial real estate broker benefit you in this situation? The broker has the most accurate information about the currently available buildings. The broker can have all the available buildings with just a few clicks of their mouse and can set up appointments to tour the warehouses. This will save a lot of time and frustration for the user who is driving around and spending hours looking for signs and calling the agent.
Commercial real estate brokers will also be able to speed up the time in negotiations. They deal with real estate transactions on a day-to-day basis. With this experience negotiation time is cut down significantly. The broker knows what materials the owner is looking for and they are able to double check items for you, as the user, to insure that you have all the necessary materials. I talk a little bit more about this later on in this blog post. With this sped up negotiation time, the benefit of having a commercial real estate broker in this scenario is quicker move in date so you may begin your normal business operations in your new location.
A good broker will have supreme knowledge of the market they are working in. They will know the current available supply of buildings, the average asking price of similar buildings, the players in the market (the owners and users), the comparable buildings, environmental issues with particular buildings, future development plans in the community, and many other aspects. A broker who has little to no market knowledge will not benefit you at all and could possibly be determential to your business's success. Hiring a broker with little to no market knowledge would be like hiring an electrician to do plumbing work in your home. Sure the electrician may know how to use tools and undo some pipes, but they probably will not perform a successful job like a ceritifed plumber would. All said and done, a broker with excellent market knowledge will not only save you time and money but save you from the headache of doing extensive research about the current building supply, average asking prices, and the other factors I mentioned above.
Real Estate Experience
Another benefit a commercial real estate broker brings is their real estate experience. Their full time job is being involved in real estate transactions. They know how to word an offer to insure that the items you ask for are presented to the owner, negotiate, and the required materials upon acceptance of the offer, such as financial statements, tax returns, certificate of liability, and the security deposit. As a tenant, this process can be overwhelming and some steps may be overlooked resulting in an offer that is not accepted. For this exact reason is why I say, "It doesn't hurt to have an extra pair of eyes look it over."Again, this is no cost to you as the tenant/buyer. It would be really awful if you went into a lease with an owner thinking that you would be able to put in extra office space and the owner rejects it later because it was never brought up or agreed to in the initial negotiations. The user's business in this hypothetical scenario could be severally damaged because they won't be able to perform their normal business operations.
I think it is always wise to hirer a commercial real estate broker because as a user it is no cost to you and the benefits the broker brings to you are vast. There are numerous reasons why a commercial real estate broker or agent can benefit you when you are searching for your next warehouse. The three I find most important to a user are time saving, market knowledge, and real estate experience. A broker that is highly skilled will be able to hopefully cut down your closing time, provide accurate and useful information, and negotiate a deal that will potentially benefit all parties.
Please give me a call if you are in need of a commercial real estate broker in the Los Angeles, California or Orange County, California areas. I specialize in industrial real estate and would love to help you with your real estate needs. Please see my contact information below or on the "About" section on our website.
-Kevin Romano, Senior Associate
(714) 521-0800 x. 2