Chinese military strategist Sun Tzu, in his widely admired “The Art of War,” wrote that victory in battle is usually won or lost by the very first move a combatant makes. The same can be said of commercial real estate. Many times, the first move in that arena involves retaining a commercial real estate broker or adviser. Selecting a qualified broker, however, is often a task taken too lightly, and that error can be costly. Over my 30-year career as a commercial real estate specialist, I’ve seen the business become more sophisticated and complicated, as developments have evolved, market needs have changed and government regulations have become increasingly complex. The evolution to the increasing complexity has meant that there are now – more than ever before – hidden opportunities to make poor or uninformed buying or selling decisions that can hamper profits or result in losses. The small investor who participates in perhaps a handful of commercial real estate transactions in their lifetime simply cannot afford the risk of receiving poor or uninformed advice. Following is a suggested process to select a qualified real estate professional to meet your needs.
- Seek sound proven advice. This is critical. Don’t trust your commercial real estate to a golfing buddy, a neighbor or the agent that sold your home. Instead, research commercial real estate brokers who specialize in the product type or area you are interested in or targeting.
- Verify, through online searches or independent sources that the brokers you are interviewing have sold or leased similar properties to the one you own or intend to purchase.
- Interview a few. Shy away from a broker who claims to be an expert in residential and commercial real estate. The complex nature of commercial real estate, and the volume of information associated with various individual product types, requires focus. Ask about market specifics, such as zoning, the entitlement process, and recent sales and leases. Is the broker able to explain market dynamics in depth? Ask about the broker’s marketing plan, and specifically how the broker would feature your property. Ask to see sample property fliers and detailed offering memorandums, and ask them to be explained in detail.
- When buying property, make certain your potential broker presents a site selection agreement. Property site selection is a time consuming and detailed process, reputable and professional brokers will insist on working with you exclusively.
At Harshman & Co., we strive to exceed these industry standards with each and every client, every day. We believe it’s why we’ve been successful for more than three decades – and why we can help you attain your commercial real estate goals.