How to Find the Best Commercial Real Estate Broker and What Questions to Ask

May 10, 2021 | Blog | 0 comments

How to Find the Best Commercial Real Estate Broker and What Questions to Ask

With more than two million real estate agents in the USA choosing the right commercial real estate broker for you is one of the most important decisions you will make when buying, selling, or leasing commercial real estate. Choosing the right personal broker is more important than choosing any commercial real estate company. The real estate industry is packed with commercial real estate companies. Here are some tips with which you can choose the commercial broker that works best for you.

As you start working on building your new business, you need to consider leasing a property. Whether you open a store or require space, you need the assistance of a real estate broker so that you can find the right real estate property for your business. While choosing a commercial real estate broker, there are a few things you need to do. But before that, let’s find out why you need a broker?

Why Do You Need A Broker?

Selecting, securing, and relocating to a new space – whether you are leasing or buying – is a process that is often underestimated. However, it is the most essential best practice for your business. The employees and customers you create determine the culture you create from your space.

It’s also essential to note you have a business that needs to be run. Your time should not be limited to interviewing contractors, studying rent, negotiating with landlords, and inspecting building systems.

You strongly need a commercial real estate broker who can act more than a middle person. You need a professional to help you understand the market’s ins and outs and help you find and secure the most efficient space at the most competitive price. Also, you need a commercial real estate broker who is an influential project manager, a strong network of lawyers, architects, civil engineers, contractors, and more.

A good commercial real estate broker performs these seven responsibilities efficiently:

1. Recognizes your wants

To secure the best space for you, the broker should help you by asking the right questions to determine your current needs and future needs. A commercial real estate broker needs to have a solid base and a good track record of experience to help you successfully find and secure your ideal location.

2. Filter Properties. 

There are several properties to choose from, and you do not have time to look at them all. You need someone who can research specific locations, buildings, and floor plans that are close match for your specific needs. Otherwise, you have to visit irrelevant properties, and it will waste your time.

3. Knows rental rates, landlords, and property owners

Unlike a property deed, commercial real estate leases are not public documents. Your broker should keep a close eye on the market and know what all the landlords offer to understand the market rates, building expenses, and legal tenant/landlord responsibilities. Likewise, your broker should be familiar with the reputation of the landlord and/or owners.

4. Checks all systems 

Sure, you can find out which space you need, but have you checked the building’s electrical and HVAC systems? What about plumbing? These items are essential to check whether you are buying or leasing for apparent reasons and purchasing. Even if it is not your financial responsibility, you will be inconvenienced by an outage or inadequate and constant repair of old building systems. Your broker will make sure to negotiate upfront who is responsible for paying what in the lease or purchase. 

5. Motivates the competition 

Once you drop your options down to two or three buildings, your broker should request proposals that list options such as standard market tenant improvement packages, increased operating expenses, and realistic load factors. It allows you to compete for apples to apples, and it encourages the landlord or seller to compete for your business and offer you the best deal.

6. Buildout costs to make sure they won’t break you

Before signing your name on the lease, you need to find out what the costs are to build your place – you don’t want a bill that exceeds the landlord’s tenant improvement allowance. Before signing a deal, your broker should take the time to diligently research and competitively incur any hard and soft construction costs. You can also expect your broker to negotiate the most aggressive tenant improvement package with the landlord so that there are no surprises on the way.

7. Negotiate rates 

If you do not use the standard market tenant repair allowance for the area, you should receive a discount on the lease price. Also, the landlord will have a broker who negotiates on his behalf, and you will need someone at the outside viewing table for your benefit. Always be actively engaged in the process, but allow your broker to negotiate for you and then check your contract before signing.

How to Find The Most Suitable Commercial Real Estate Broker?

There are few tips you need to consider while choosing the best real estate broker:

Consider your needs

When you first talk to a commercial real estate broker, they need to know what you are looking for in your business. Find out what type of property are you looking for? What do you need? How big should it be, and where should it ideally be? Consider your needs and share them with a real estate broker. This will help them to help you find the right assets fast.

Prefer to Use Referrals or the Internet

If you know any local business owners around you, ask them for a referral about who they use or whether they like the broker they worked with if you do not yet know the local business owner or have not received any suggestions, search online to learn about commercial real estate brokers in your area.

Find a Broker with the same industry experience

Read their reviews online. Look them up on LinkedIn. If you feel that you have contact with the broker online by visiting their website, they will know what experience they have and how much experience you are seeing. You need a real estate broker who has experience in helping new business owners like you and who have a lot of experience in your industry so you can ensure they can help you find the right property.

Interview with your potential broker

Once you have some potential brokers, go ahead and schedule a time to speak with them. Prepare for this interview by writing any questions you may have, do not forget to ask them. You can ask holistically about their experience, names of their recent clients,  and their experience in your industry.

Choose a Broker You Can Trust

From the list of potential brokers, choose one that has the maximum experience, is ready to help you, and you feel you can trust. You will work closely with the real estate agent until you find the property you like, so you can be sure that you can believe what they say and judge when it comes to properties you might be interested in. Make sure they return your calls. 

6 Questions to Ask A Commercial Real Estate Broker

Q.1 How much experience does your broker have in commercial real estate?

It will take years to get the type of in-depth market knowledge and the excellent commercial broker has. Also, it takes time to develop the skills required to analyze things like investment, return rate, net operating income, etc. You must ask your broker about how many years of experience they have in this business.

Q2. Does Your broker have the proper tools to represent you?

You will need to make sure that your broker has the best equipment and market information available because it is necessary to represent you adequately. Do they offer mapping for competitors, providing comps in the area and sales of other retailers or restaurants. 

Q3. Does your broker have a conflict of interest?

Engage a commercial broker who can work for your best interests. If you’re a tenant and call about some real estate property, you will get a call back from the landlord’s broker. That broker would be happy to give you space but would represent the landlord, not you. Engage with your tenant broker to represent your interests. They will look for your interests. All their services are free for you. Although they work solely for the tenant, their fees are paid by the landlord.

Q4. What locations, cities, or specific neighborhoods are your broker most familiar with?

Tenants require an advisor with in-depth knowledge of the specific markets in which they are interested. When deciding between multiple locations, limit the options that meet your organization’s particular needs and use a broker with experience and knowledge of those desired locations. Make sure they know what is happening in the area – new road construction, trains in the area (nosie), landfill near by (smells), safety issues, and overall growth or moving out. 

Q5. Where do they see the market going right now?

It’s another way of asking whether markets are expected to move up or down soon. Of course, such information is essential to a tenant because it ultimately determines whether the lease terms are more favorable to the tenant or landlord relative to current market conditions.

Q6. Ask your broker about their broker services and pricing?

It is common for a broker to be compensated through the seller or landlord. However, there are exceptions to this practice, where a broker can separate charges for a one-time project, such as a lease review. Although these are far less common, they are worth asking about.

Are you looking for Buying or Selling Commercial Real Estate Properties in Texas?

  • Need a development partner? We can find the right tenants and manage the entire development process –land acquisition, entitlements, zoning, and leasing.
  • Need a Texas broker? We will find the right properties to lease or buy for you – guarantee to find hidden opportunities and off-market sites. Or if you are an out-of-state broker and need a Texas broker to represent you.
  • Need funding for your build-to-suit development? We have several capital investors ready to place their money.
  • Need to place your money outside the stock market and want mailbox money? Have you considered buying a NNN Investment Single Tenant Commercial Retail Real Estate Property – McDonald’s, Starbucks, Dollar General, etc.
  • Need a contact person for a retailer or restaurant, or City? After 30 years in the business, we can help you make the connection to the right person.

To brainstorm opportunities, call Pam Goodwin at 214-929-9013 or schedule an appointment at pam@pamgoodwin.com.

Contact us Goodwin Commercial, one of the best commercial real estate companies in Texas, where Pam Goodwin can help with the best real estate strategies for investing in the real estate market. Pam is one of the topmost recognized experts on commercial real estate with more than 30+ years of experience in the following: Retail and Restaurants – single tenant net leased pad sites, tenant representation, NNN investments, ground-up development, 1031 exchanges, SBA loans, entitlement services, and available for mentoring, consulting, and classes both via Zoom or in-person and as a speaker to your group or corporation.

Pam is an expert at helping investors buy/sell the property and build wealth. She is known for her confidence, knowledge, determination, resourcefulness, finding hidden opportunities, and Rolodex of connections.

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