BENEFITS OF HIRING A COMMERCIAL REAL ESTATE BROKER*

A commercial real estate broker works with property owners and tenants to buy, sell, and lease real estate for commercial use. Compared to buying a home, where a lot of emotion is involved, a commercial agent understands that investment real estate is mainly a numbers game. The top benefits of hiring a skilled commercial real estate broker in your local market include:

• In-depth market knowledge to find the best commercial property for sale, including properties just coming to market.
• They represent both buyers and sellers of commercial real estate – and tenants seeking to lease or sublease space – while always keeping the client’s best interest in mind.
• Hiring a commercial broker is cost-effective for CRE investors and tenants because the seller or landlord normally pays fees instead of the client.
• Access to commercial listing sites to quickly lease space by generating as much demand as possible from qualified tenants.
• Posting available commercial property for sale on the top commercial real estate websites ensures the property is seen quickly by as many buyers as possible. 
• Networking with other commercial agents and local real estate experts helps locate hard-to-find property and allows investors and tenants to get the best deals on the market today.
• Help clients to stay objective and focused, calmly explaining and exploring all options of a commercial real estate transaction without tipping their hand to the other parties in the deal. 
• Commercial real estate brokers also save clients time and money by doing the legwork to find opportunistic properties to lease or invest in and hammering out the best deal by knowing what to ask for and when.
  

Skills to Look for in a Commercial Broker:

Finding a great commercial broker is similar to looking for any other specialized service professional, such as a doctor or lawyer. Skills to look for in a commercial real estate broker include:

Expertise – Particularly, expertise in specific commercial real estate asset classes like office, retail, multifamily, industrial, or special use investments.

Experience – What they’ve done, whether that’s representing tenants looking for space to lease or sublease or working with a landlord to lease or sell commercial property.

Network – Presence in a specific geographic area or submarket signifies the broker has an established network of contacts and understands how deals get done and how tenants and property owners work.

How to Hire a Denver Commercial Real Estate Broker:

First, determine what your specific needs are. For example, are you an investor with anchor space in a shopping center that needs to be filled, or do you own a free-standing building and seek a regional or national tenant willing to sign a triple net lease? 

Next, look for a broker who only works in commercial real estate. Some agents only “dabble” in commercial estate and sell houses most of the time, which means they won’t bring value to your transaction. In some small markets, it may not be possible to find a specialty broker who only handles leasing or retail property, for example, but always look for an agent who makes their living in commercial real estate. 

Third, narrow down your choices by reviewing the professional designations each prospective candidate has to help choose the commercial real estate broker best for your needs. Commercial real estate practitioners with a combination of classroom and real-world experience can help clients reduce risk, enhance credibility, make the right decisions, and negotiate the best deals possible. 

It also behooves you to look for brokers that are part of commercial real estate networks and organizations and hold industry certifications. Some top commercial real estate designations include Certified Commercial Investment Member (CCIM), Society of Industrial and Office Realtors (SIOR), and Certified Property Manager (CPM) from the Institute of Real Estate Management (IREM).

Different Types of Commercial Leases:

• Triple Net (NNN):  the tenant is responsible for the base rent plus the NNN amount, which is your portion of the buildings taxes, insurance and maintenance.  In these leases, the landlord provides their building to the tenant and the tenant is typically responsible for the spaces expenses such as the HVAC System, etc.    
•  Modified Gross (MG):  the tenant is responsible for the base rent plus smaller expenses, such as utilities. 
• Full Service Gross (FG):  the tenant is responsible for the base rent only, which includes repairs and maintenance, insurance, taxes, utilities, etc.  Though, if the landlords annual expenses increase above the “Base Year” from when you occupied the space, the tenants would share the additional increase of expenses. 

What is a Tenant Representation Broker?

Tenant representation brokers work alongside tenants to assist them in all aspects of the leasing process. They are the concierge for all things leasing. Tenant reps require no out-of-pocket fee and have dedicated their careers to learning the ins and outs of the commercial real estate industry.

What does a Tenant Representation Broker Do?

Tenant representation brokers bridge the gap between tenants and landlords. They facilitate the entire leasing process, from the initial needs assessment and site selection, to negotiation, execution of the lease, occupancy, and beyond. A tenant representation broker can assist you with:

1). Relocating or renewing your lease.
2). Identifying space wants and needs.

Tenant rep brokers are excellent at helping identify what a tenant needs in their next space. They often do so by helping you answer the following:

• How much square footage do you need?
• What part of town do you want to be located in?
• What building and space amenities are desired?
• What is your preferred lease term?
• What can you afford as a business?

3). Surveying the market to see which spaces are available.

Navigating listing sites on your own can be tough, it is often difficult to tell what is still available and what is not. Tenant rep brokers have access to many resources along with their connections in the industry to help identify options that best fit the tenant’s needs.

4). Arranging tours to see potential spaces.

5). Negotiating the terms of the space.

Once a potential space is identified, tenant rep brokers can begin the most valuable portion of their job, the negotiation. Brokers have an advantage in the market, knowing fair lease rates and terms, both of which they can negotiate with the landlord on your behalf. This means tenant reps help with submitting proposals, writing letter of intents, leveraging lease terms, and handling communication with the landlord.

6)  Finalize lease and coordinate move in date

*Source:  Crexi March 2021