Commercial brokers: the true professionals of real estate.
If you read this column, you know that I have very little tolerance for incompetence in our profession. But for those of you who lease stores and other commercial space I have nothing hut admiration.
Those who do this for a living for any amount of time are the real professionals of the industry. Your tact, ingenuity and shear know-how are a wonder. I guess anyone who can survive in the commercial sector has to have something special. You must deal with all manner of professionals with a certain elan. You have to smooth the waters between intransigent owners and sometimes naive tenants.
In a landlord's capacity, I have negotiated and signed thousands of leases. In those instances where an outside broker has been involved, that person overwhelmingly has made the difference between having the lease signed or not. What is it that makes this segment of the industry so unique?
I guess the biggest difference is the nature of the person who chooses this as his livelihood. There is no way you can be a commercial broker part time. In order to be any good at it you must devote yourself entirely to your occupation. Those who do not aren't in the business very long.
I frequently teach real estate courses and for the past year or so I have taught many continuing education classes. The first session I always ask my students to state their names and how they are currently involved in real estate. Those involved in the residential end overwhelmingly are part-timers or are not doing anything at present. Those who are in the commercial side of the business are working full-time in the field. Further, their breadth of knowledge is usually superior to the other students. Their questions and observations are precise and germane to the topic under discussion.
I don't want you to think that I never have disagreements or points of contention with brokers. If any of you have ever dealt with me you know that wouldn't be true. Even when a deal does not happen, the disagreements are of a business nature and do not resort to personalities. I think we all keep in mind that there always is another deal, something that is missing on the residential side of the business.
To illustrate that point, I want to give you two examples. I was selling a cooperative apartment I own. Naturally I gave it to brokers and they began showing it. Since I had bought it years before from a sponsor with a rent regulated tenant, the price I paid was relatively cheap. So when the tenant vacated, I was able to have an asking price slightly less than other similar apartments. One of those brokers brought a buyer and I accepted the offer. The contract was drawn and it was contingent on financing. I insisted that if the buyer could not find his own financing, I would have the option of providing the mortgage. I guess this seemed to the broker a "done deal."
The time elapsed for the buyer to obtain financing, so I began inspecting the man's financial records. Once I began to delve into his credit history, I could see why he was turned down by a bank. He simply did not believe in paying his bills on time and in some instances not at all. Therefore I passed and told my attorney to return his deposit. The broker called incensed. How could I possibly do this. Didn't the contract state I would provide the mortgage. I reminded him that I had the option to do so. I further told him that if he had checked the buyer's credit history before hand, he would have seen there was no way he would qualify for a mortgage or receive a board's approval. He then began insulting me with all manner of epithets. Finally, hanging up, his last words to me were that he was going to sue for his commission. By the way, he never did.
Several months ago, a commercial broker who I had worked with in the past brought me a tenant for a commercial space that I manage. An offer was made and accepted and the leases were drawn. For some reason, after prolonged wrangling, they weren't signed and the deal was dead. The broker, making a last try, got into a verbal argument with me. Though it was heated, we never resorted to cursing or personalities. When it was over, she and I still maintained a good working relationship. In fact, as I write this, she is showing space in that same building and expects to bring me an offer.
I can't say more than that in analyzing the difference between our commercial and residential brethren. Perhaps because negotiations are much harder when it comes to office or loft space, people learn early not to burn their bridges by rhetoric. Perhaps because the commercial real estate world is so much smaller, we know there may be an endless supply of tenants, but only a limited number of owners. We learn to temper our remarks. Whatever the difference, commercial brokers brokers are for the most part a great bunch of people to work with.
(The author is a Real Estate Consultant advising owners, co-ops and condominiums. To contact the author call 212-921-8043)
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|Title Annotation:||R.E. Views|
|Author:||Campenni, Thomas F.|
|Publication:||Real Estate Weekly|
|Date:||Dec 27, 1995|
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