Why hire a commercial tenant rep broker?

Photo by Elifin Realty on Unsplash

Considering the way properties typically are listed, the more appropriate question is why wouldn’t you? When a commercial property is listed with a broker, the commissions are already baked in. Therefore, if you don’t take advantage by bringing your own representation, you are essentially leaving money on the table. You are not fully taking advantage of all available resources. And when you pass on the privilege of tenant representation, that money either goes to the listing broker or stays in the landlord’s pocket.

The landlord and his or her broker are looking out for the landlord’s interests, first and foremost. When you hire your own representation, they are looking out for yours (and again, in a typical deal structure, the landlord pays for this privilege). As part of this process, your commercial tenant rep is combing their databases (some of which you do NOT of have access to); reaching out daily to other agents and property owners; and going over multiple deals at a time, leading to up-to-date knowledge of what’s being done in your geographical area. 

Photo by Scott Graham on Unsplash

And this applies to when you are renewing your lease as well. If your lease is out of options, and you are starting over in the same location, your deal should be just as competitive as any new tenant’s would be. Actually, yours should be even more competitive, because your business is the one already in the space and would be the least work for the landlord with no turnover required (assuming that the building is not being redeveloped). 

Always take advantage of your right to your OWN representation when leasing a commercial space. Come to the bargaining table with someone focused on your interests above all else. 

Industrial Real Estate Values Skyrocket in Nashville, Growth Projected to Continue

Photo by Guillaume Bolduc on Unsplash

As you’ve surely already heard, industrial property is red hot, and is changing the commercial real estate market, especially in cities like Nashville. According to a recent CoStar article, “logistics companies are expanding to secondary North American cities, transforming portions of once sleepier areas that have seen huge population upticks in the past two years into larger distribution hubs.” Along with other “secondary cities” such as Cincinnati, Phoenix, and Tampa, the Nashville real estate market is exploding right now, in part due to this industrial expansion.

Some notable Q4 sales in the Greater Nashville market include local developer CA South’s purchase of two parcels along the Cumberland River (690 and 1106 Davidson St.) for a combined $21.5 million and a 123.3-acre property, also located near the Cumberland, that went for $54 million to logistics giant Prologis. And industrial rents are following suit: According to the Nashville Post, “average triple-net asking lease rate in Q3 was $6.16 per square foot — a 12-percent increase year-over-year.” This is a record high.

Photo by CHUTTERSNAP on Unsplash

This pervasive trend around the nation is causing many large properties, particularly office buildings, to be converted to industrial space by developers looking to capitalize. And even expensive property subcategories such as cold storage are seeing a significant bump.

Years before the start of the global pandemic, Amazon was already changing the game with its ultra-convenient consumption model, pushing the need for more and more last-mile warehouse and distribution centers. However, the pandemic added fuel to this already growing phenomenon, as it, along with related behaviors and policy decisions, converged to expose weaknesses in the wider suppler chain. As a recent CCIM article points out, “that last mile is dependent on multiple components of infrastructure, including ports, inland waterways, rail, highways, bridges, energy, aviation, and even levees and storm-water management. All must work in synchronization for the last mile of delivery to function at peak efficiency and capacity.”

In short, the ways we are now governing, shopping, eating, working, planning, and doing business are all affecting industrial real estate, pushing up demand for the foreseeable future.

Selling Commercial Property

Recently, we read an online article with a misleading “how to” title, ostensibly meant to teach about marketing property as a for sale by owner. However, the funny thing is, after the opening paragraph, it basically makes the case for why one should just hire a commercial agent and let the realtor do the work!

Well, no deception here, folks: that is exactly what this article is about. We definitely think you should hire a qualified, licensed agent to help you get your property sold, and these are the reasons why:

1.    Commercial real estate agents have the tools. You can be a highly knowledgeable investor, or a residential realtor who dabbles in commercial, and still not have regular access to the technology and subscriptions needed to get a commercial property appropriately priced and then marketed to the right people. A commercial agent will have all this covered. Believe us, there are things in a commercial agent’s toolkit that no primarily residential agent is gonna pay for, and you as the owner/investor would be much better off using your capital to pay commissions once the property has sold for top dollar.

Photo by Christian Wiediger on Unsplash

2.    Just as residential agents have their spheres of influence and databases, commercial agents have contacts that only get cultivated through regularly working in the business of buying, selling, and leasing commercial real estate. And unless this is what you do for your livelihood, it’s unlikely you will have built up the kind of network it takes to get a commercial property sold. Let a professional who works in this area every day, harness their network for your benefit.

Photo by Charles Forerunner on Unsplash

3.    If it is your building or your lot, then you may be in danger of inflating the value. It could be that it’s been your “baby” for a long time—it could even be a kind of family heirloom—and consequently, you as the seller may have a number in mind that it’s just very unlikely to bring. Conversely, a residential agent is probably used to a much quicker close, and therefore, could be all too willing to negotiate a selling price well below what a commercial property is truly worth. Ideally, you will have an experienced commercial agent guiding you and setting realistic expectations, but also advising you as to what your property should eventually bring, just as long as you remain patient.

Photo by Chuttersnap on Unsplash

If you are selling commercial property in the Nashville area, then Chandler James would love to assist you. But regardless of where you are or with whom you are likely to work, please take our advice and let the specialists in commercial real estate market your property and get it sold.