Commercial Brokerage

Real Estate Brokerage

Why use a Broker?

Brokers are armed with the skills to get you the best results for the best price. A good Broker knows the market and can guide you through the process. Striking out on your own is not a good idea. It is important to have professional representation in the market place. Would you go to court without an attorney to defend you? Probably not.

How are Brokers Paid?

Brokers are paid upon the completion of a transaction. In sales of buildings, the Brokers are paid a commission of a negotiated percentage. If there is more than one Broker involved the fees are typically divided between them. There is no standard commission rate. Fees could range from 3% to 10%. Commonly a fee of 6% is in the sales contract. If a Broker completes a leasing transaction, the Landlord typically has fees set aside as the cost of doing business. Landlord is responsible for paying Tenant Reps and Landlord Rep fees.

Types of Commercial Brokers

Commercial Brokers typically specialize in a product type. The categories are; Retail, Industrial, Office, Investment and Multi-Family. So, for example, if you want to open a clothing store you would want to find a Retail Broker. Commercial Realty Advisors specializes in Industrial, Office, Land and Medical. When looking to hire a Broker, you may want to ask for referrals from your attorney or CPA. Larger firms have Brokers into one of these categories.

Office Brokers

Brokers specializing office space are armed with a special skill set to accomplish such transactions. There are typically two brokers involved, a Landlord Representative and a Tenant representative. A good Broker will take the time to understand your goals, needs and objectives. Then show you options in the market that are a fit for you. Office Brokers are used to coordinating architects, attorneys, Landlords, etc. They can also explain to you the pros and cons of each office building. A financial analysis should be done as well so you can compare “apple to apples”.

Investment Brokers

Investment Brokers specialize in finding and selling assets for real estate investors. They work with both private investors and institutional investors. Often times the brokers will work with the building owners to increase the tenants and rents received to value engineer the property for the sought after asking price. The value of such properties are derived from a capitalization rate. The “cap” rate is the rate of return on a real estate investment property based on the income is expected to generate.

Industrial Brokers

Industrial Brokers specialize in industrial buildings such as:
Warehouse
Factory
Industrial Plants
Trucking facilities
Construction Yards
Flex buildings, etc.

They have unique knowledge of the specific things to look for such as clear heights, dock doors, overhead doors, floor loading, etc. CRA does a lot of work in the Industrial sector both helping Buyers and Sellers, Landlord rep and Tenant rep.

Retail Brokers

Retail brokers specialize in spaces where you go to buy something. Big box retail refers to the Wal-marts of the world. Sam’s Club, Costco, Home Depot and the like all fall into this category. Often time these developments take years to pull together. Assembling land from multiple owners, zoning changes, getting utilities to the site can all be obstacles. Junior box retail refers to your medium type retailers (25,000 to 40,000 SF). An example may be Bed Bath and Beyond. In Line retail refers to strip centers. End cap space refers to the end spaces of a strip center with two windowed sides.Some examples would be Sally Beauty, USP Stores, and Einstein Bagels. Outlots refer to smaller stand alone retailers typically place in front of big box development. Starbucks and Applebee’s would be good examples.

Multi-Family Brokers

Multi-Family Brokers refers to the sales of apartment buildings. Sometimes it’s one building and sometimes its a portfolio of buildings. These too range in classes such as;
Garden Style
Senior Living
High Rise
Condominiums
LIHTC (tax credit)
Student Housing.
These assets are often sold on a cap rate based on the NOI or net operating income. Also location and age of the product have a great deal to do with the value.

Corporate Services

Corporate Services is an overall look at a corporation’s real estate portfolio. This could involve looking for ways to make the occupancy cost of facilities more efficient. Some examples:
Outdated facilities
Workplace Productivity
Best and highest use.
Economies of scale
Lease vs. Buy
Space planning for efficiency
Renegotiating Leases
Build new vs. remodeling.
Sale Lease backs
Energy usage analysis

Commercial Broker vs. Residential Agent

Many people aren’t quite sure of the difference of a Commercial Broker vs. a Residential Agent. To simplify, a Residential Agent commonly refers to one who is in the business of selling homes. Commercial Brokers do not typically sell homes unless it’s part of a larger commercial development. Both occupations have unique knowledge specific to his or her occupation. It is important to hire a Commercial Broker when dealing with your commercial needs. We often times have seen residential agents try to do the job of a commercial broker which usually is a disaster. There are some realtors who do smaller transactions,for example a tavern with apartments on the second floor. For larger transactions, find a Commercial Broker.
Due Diligence