Choosing the wrong real estate agent/firm can result in mistakes that can cost your business tens of thousands of dollars, says R.M. Jack Jones III, Vice President and Director of Management Services for the Dallas office of Grubb & Ellis Company.
“Common errors that real estate consultants can make include not clarifying what you’re looking for, not understanding your position and what you’re trying to achieve, and coming back to you with bad information, especially at the outset of the relationship,” Jones says.
Smart Business talked to Jones about the process of nailing down a real estate consultant who will maximize your investment.
What are some of the services to look for?
Are you interested in expanding or contracting in existing space? Taking over a smaller or larger building or perhaps attracting investors to your building? Which real estate firms can actually help you do that, and which ones have the research departments and market information to put you in the best possible position?
Your cause can be better served if the firm you’ve chosen is broad-based throughout several real estate disciplines so that various personnel can intelligently discuss all sides of the real estate equation without necessarily being in conflict with one another.
The larger firms are pretty broad-spectrum, but some boutique firms specialize in one segment of real estate in a particular market. If the agent you choose is providing good service, he or she should not only reach out to colleagues, but possibly a boutique firm.
Once you’ve chosen the company, how do you select the right individual agent or consultant?
Look for somebody who can listen to you and educate you. Better firms can pair you with the right person to suit your particular business needs. The best position you can take is to interview or get to know more than one agent.
Before making your selection, you must look beyond the interpersonal factors. Look for a collaborator. The consultant must be able to reach out to specialized colleagues if a need exists to invest or explore other disciplines, and then be able to keep the communication lines open and the process running smoothly.
Don’t be reluctant to spend the appropriate time to make your choice. That decision is an investment, and it will save time and possibly tens of thousands of dollars down the road.
Ultimately, you should get to know your consultant, get along well, and trust him or her. It also helps to share the same business philosophies and understand common goals.
What does the agent or consultant need to know?
Your real estate decisions have a huge economic impact on your company, no matter what kind of move you’re contemplating. It’s the consultant’s job to solidify the relationship.
The most critical question that he or she needs you to answer is: What are you trying to achieve in making your real estate decisions? Are you simply renewing? Are you looking to expand or contract your business? What type of building are you looking for? What type of facility? Is a lease the best scenario, or should you consider owning a building?
The consultant is not looking for corporate secrets or proprietary business information. He or she should know how to get the needed information without looking into your mainline business decisions.
What about market-specific information and trends?
Having the correct market information is critical. In some respects, you may be receiving and reading conflicting information about the market right now. For instance, many reports say that the Dallas-Fort Worth Metroplex is booming and growing. But the real market trends may depend on factors like leasing absorption in a micromarket and whether the monetary values of buildings are trending up or down.
You have to understand that, yes, some of your hunches are probably true but the real market might be the opposite of what you’re seeing or hearing in the news or any feeling you might have. Having somebody help you understand the market is invaluable.
Should a company owner or CEO seek a new agent or real estate company every time he or she needs to change locations?
Everyone aspires to long-term relationships. If the real estate firm has been looking out for your best interests, you will be enticed to use the agent over and over. If your company’s situation changes, you may want to start the interviewing process again but if your consultant is doing the job, he or she wouldn’t lose out. <<
R.M. JACK JONES III, CPM, is Vice President and Director of Management Services for the Dallas office of Grubb & Ellis Company. Reach him at (972) 450-3274 or Jack.Jones@grubb-ellis.com.