Technology has changed how buyers and tenants explore the commercial real estate market. Multiple online listing services showcase the available commercial properties in a given market, putting a great deal of information at a prospect’s fingertips.
“While these services are valuable for getting a sense of the market, there’s a lot of information that’s not included that could change the value proposition of a property considerably,” says Joseph V. Barna, a principal at Cushman & Wakefield/CRESCO Real Estate.
Smart Business spoke with Barna about the role of commercial real estate brokers/consultants in an environment increasingly touched by technology.
What information might not be available through online searches?
Listing services can’t illuminate incentives designed to court business, such as free rent, tax abatements, graduated lease rates, below-market financing or tax credits. These valuable incentives affect the total occupancy cost of a property. Buyers and tenants do themselves a disservice if they make a decision without first consulting with a knowledgeable broker/consultant who is aware of these offsets.
Lease comparisons in submarkets often aren’t tracked correctly through listing services. Brokers/Consultants, however, track completed lease transactions, which are recorded in their database after transactions are made. This real-time information can help brokers guide clients in submarkets to find the sweet spot in a deal price and structure.
Similarly, buyers can use brokers to get sales comparisons for specific types of properties in a specific submarket. Accurate, up-to-date comparisons guide buyers and tenants toward a property’s realistic true market value. With that guidance, buyers aren’t taking a stab in the dark on price. Rather, they’re making a business decision based on facts.
How has the role of the commercial real estate agent changed?
Commercial real estate brokers have become well-rounded consultants. They’re active in the market every day and, because they represent specific product types, are a wealth of knowledge in a given marketplace.
In a consultative role, brokers talk with buyers and tenants about market trends, sale and lease prices, and provide value-added services such as project management for buyers who intend to make renovations to a property. Larger firms often have service lines to manage properties, offer guidance regarding construction/project management, incentive procurement, environmental issues and more. They help buyers and tenants consider total occupancy costs, which includes utility consumption, maintenance/upkeep and taxes incentives that could reduce the tax burden.
Brokers also help buyers and tenants evaluate locations that meet their specific needs beyond the brick and mortar, such as access to employees, utilities, freeways and areas that are zoned for their specific intentions. These important aspects can be overlooked without a knowledgeable broker to guide the process.
At what point in the search process is it prudent to get an agent involved?
Online listings are a great way to get a sense of what’s in the market and a ‘snapshot’ of range of value. However, it makes sound business sense to reach out to a broker/consultant early in the process who understands the specific types of property and is armed with real-time market knowledge.
Prospective tenants and buyers without knowledgeable representation are at a disadvantage at the deal table. Bringing a professional on early in the process levels the playing field. The end result is an informative decision based on all the critical components of a transaction.
Most people only buy or lease property a few times during their professional lives. It’s to a tenant’s or buyer’s advantage to have the right team on their side of the table to maximize value. Real estate agents are specialists working in the market every day. They have the experience to help clients achieve their objectives.
Insights Real Estate is brought to you by Cushman & Wakefield/CRESCO Real Estate.