Whether you’re a landlord, a tenant, a buyer or a seller, choosing which commercial real estate firm to represent you may be the most important predictor of your business success. Hiring the wrong firm could cost you time, money and countless setbacks. Here is a list of questions to consider before you make that important selection.
1. Do they offer a full range of services? Real estate transactions are generally very complex and can involve multiple business lines, such as tenant representation, landlord representation, investment sales, insurance, financing, property management and project management. Therefore, you need to consider how efficient a company can be when it comes to bringing in multiple service lines. Outsourcing services to multiple providers can often lengthen project times, add complexity for the client and increase overall project costs. Full-service firms have a major advantage over their limited-service competitors because of their ability to aggregate multiple functions in an efficient manner for the client.
2. Is the firm a local area expert? The fact remains that achieving success in the real estate industry still depends on knowing the local market and having the right “boots on the ground.” Leveraging the experience and expertise of a locally-based team is a crucial element of every successful transaction. It’s nice if a firm can claim that they have an international office in London or Tokyo. But how exactly does that help your project in Atlanta or Tampa? In the end, real estate remains a business where knowledge and relationships at the local market level matter.
3. Will they walk away from a bad deal? Sometimes the best deal for a client is the one they never do. However, in most cases, real estate firms do not get paid unless a deal gets closed. So unfortunately, some disreputable firms will negotiate a transaction, even though it’s not in their client’s best interests. Do your due diligence beforehand to make sure that your advisors interests are aligned with yours. Check a potential firm’s references carefully and make sure you truly understand their value system and approach to business.
4. Can the firm customize its system to fit your specific needs? Many businesses still run their operation with a “one size fits all” approach. For example, let’s say a global firm has a process established for a certain business and they literally plug thousands of clients into that same process. It’s efficient and maximizes profits for them, but as a client you either plug into the process like everyone else or the machine spits you out. The reality is many clients often get the same watered-down service. In real estate, differentiation is critical and every deal is unique. Clients can no longer afford to use the old-fashioned, path of least resistance approach. The best service providers operate with a “one size fits one” mentality and are nimble enough to tailor their approach on a project-by-project basis. Find out whether the firm you’re considering hiring can customize their services to fit your specific needs.
Kurt Keaton serves as president of real estate services and management services with Franklin Street. He has 20 years of experience in the commercial real estate services industry. Keaton can be reached at [email protected].