If you and your company need a space of your own, then your instinct may be to start searching for listings by yourself. But you may find that after scouring listings and traveling to potential spaces, negotiations go around and around but never get anywhere.
Finding a new space that is perfect for your company doesn’t have to be a long, arduous road. With the assistance of a commercial broker, you can save time, money, and frustration. We spoke with Lauren Bates, a broker and owner of Presidential Properties Real Estate Group, who gave us insider tips for working with a commercial broker to discover a retail space that is just right for you and your team.
A commercial broker or realtor is held to the standard of local city and state laws of the Real Estate Commission, and are expected to act in the best interest of their clients. That means they protect your resources and help you navigate the process from beginning to end so you can avoid being taken advantage of. For example, a broker can compile a list of properties with similar square footage and building-use to ensure you are finding what you need. They can also provide guidance so you are paying the appropriate range in price and are not overcharged.
“When dealing with property owners or landlords, using a broker can take the headaches away for someone seeking retail space, and also to help negotiate terms of the agreement,” Lauren says.
From the beginning of your search through to the signing of a contract, commercial brokers are subject matter experts. One of the dangers of going it alone is viewing incorrect or out of date listings online for properties that may not be for lease or sale. A commercial broker can avoid this.
“Lots of people searching for property will utilize other platforms such as Zillow or Truilla. The information on these websites are not always active listings, and the status is not guaranteed to be correct,” says Lauren.
A good commercial broker will have access to the Brokers Listing Cooperative (BLC) which gives the most correct, up-to-date data regarding a property’s status. For example, Lauren told us that once a property owner receives an application they are considering, the status moves from “Active” to “Pending.”
Giving your broker parameters regarding area, price, size, and amenities can be immensely helpful in your search so that they can search the BLC for those items specifically to help find you the best options available. Then your broker can put together strategic lists of properties throughout your city for you to consider.
Once you find a space that has everything you want, next you need to make sure that it’s also at a price you want. Without a broker, you may find the owner taking advantage of you. Taking the time to research what is considered normal for lease terms and what sort of concessions a landlord can make can be cumbersome and counterproductive. But according to Lauren, “Your commercial broker should always review the lease with you in its entirety, making sure you agree with the expectations of the landlord.”
Commercial brokers can make sure you have the most up-to-date information so they can arrange the best deal for you. For example, retail leases usually start at two-year terms, but signing a longer term such as four or five years may help you to negotiate a lower monthly rate. Another great tip to consider is that if you are willing to make updates to the space, landlords may be able to offer a better price since they would not have to complete renovations themselves.
There is no upfront cost for a commercial broker. The broker is paid a commission upon lease signing by the property owner, or the owner’s real estate representative. This cost may be passed on to you through the landlord, but more than likely you will save money in the long run because they will protect your interests and try to find the best deal for you.
Transition to Ownership
A commercial broker can also help you transition into ownership. If that is something that you are interested in, it is a huge tax benefit. Lauren stated that “with ownership, the liability is greater (being responsible for the asset), but it will moreover serve as an investment that could lead to larger profitability if maintained and managed properly.” A commercial broker can introduce you to wonderful resources for lending such as Build Fund, which would assist with the acquisition of property.
Buying or renting a commercial space can be a complicated, nuanced process. There will be meetings to set, documents to look over, bids to present, all while adhering to local and federal laws of selling property. You will want to have a knowledgeable and experienced commercial broker in your corner to make the process successful.
If you are ready to start your search for a commercial space, contact your local broker or reach out to Lauren at firstname.lastname@example.org.