The foundation of successful real estate negotiations is the gathering of complete and timely information about every available space and building as well as identifying those landlords who need tenants the most. The legal community calls this process performing ‘due diligence’.
Nowhere is this more important, or more difficult to accomplish, than in commercial real estate.
Because there is no comprehensive data base readily available to commercial tenants, inexperienced business people perform their due diligence by driving the streets looking for ‘Space Available’ signs in front of buildings, or by calling off ads or brochures.
While these methods may appear logical, keep in mind that property signs, ads and brochures rarely list the size of any vacancies and the price, which can change daily. Consequently, these methods are inefficient and time consuming and place the well-meaning but uninformed tenant in front of, and at the mercy of, the well-informed broker/agent.
The various ‘listing’ agents/brokers can easily identify (read: exploit) the needs of those tenants who represent themselves by asking seemingly innocuous, but revealing questions.
Under the guise of helping the tenant locate suitable space, ‘listing’ brokers/agents routinely ‘steer’ tenant inquiries to properties they represent, or to less desirable properties listed by others in an effort to ‘sell’ the tenant on a particular building.
Therefore, tenants who represent themselves in the important step of identifying potential properties unknowingly create leverage for the landlord and dilute their negotiating leverage throughout the rest of the process.
Remember, as specialist in Tenant Representation, I work for you, never for landlords or their brokers. As a result of having completed hundreds of commercial real estate transactions, landlords and their brokers contact me daily with updates on availabilities, pricing and special leasing incentives.
I make it my business to know about vacancies in every building and, just as important, as much about the landlord’s true needs as is possible. This gives my clients valuable negotiating leverage at the bargaining table.
Stephen A. Cross, CCIM owns CROSS Commercial Realty Advisors and represents business owners, healthcare professionals and corporate decision-makers in matters involving the lease and purchase of commercial real estate. Contact: 480-998-7998; firstname.lastname@example.org.
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