Finding the right commercial real estate broker is crucial to finding and negotiating the best deal possible. Cawley Commercial Real Estate compiled the top 5 questions one should ask when looking for a commercial real estate broker.
1. How long will this process take and what are the steps?
Timing and steps depend on each situation, market conditions, and client needs. It is important to understand the client’s needs and goals from the start. Typically, the process begins with a consultation, market research, property search, negotiations, and closing. Working with a knowledgeable commercial real estate professional can help ensure a hassle-free process from start to finish.
2. What do I need to do as a buyer/tenant to be competitive and secure a space? What are typical business terms for the current market environment?
As someone looking to purchase or lease a property, it is crucial to come prepared with a clear understanding of your specific requirements and budget. Your broker can assist by offering guidance and current market conditions and providing recommendations. To stay competitive, keep in mind that it is essential to have practical and realistic expectations, and the ability to act efficiently on suitable opportunities.
Typical business terms for the current market include:
Tenant Rep:
- Lease rate
- Lease structure (modified gross or net)
- Term (length of the lease)
- Annual rental escalations
- Security deposit amount
- Rent abatement (free rent)
- Tenant Improvement Allowance (TI)
- Landlord make-ready work
- Tenant responsibilities for property maintenance
- Landlord responsibilities for property maintenance
Buyer Rep:
- How aggressive or not to initially offer on price
- Amount of earnest money deposit
- Timing of non-refundable earnest money deposit
- Due diligence timing
- Financing timing
- Environmental investigation timing
- Why is the seller selling?
- Most important conditions to seller
- What is the competitive environment for the buyers
3. What are the advantages to hiring an exclusive broker to list my property for sale/lease?
Enlisting an exclusive broker to list your property for sale/lease offers numerous benefits. An exclusive broker solely concentrates on your property, as opposed to non-exclusive brokers who may be handling multiple listings simultaneously. This allows for a deeper understanding of your properties distinct selling/leasing points and more effective targeted marketing campaigns. Moreover, exclusive brokers can assist you in creating a comprehensive marketing strategy, providing timely updates and advice, and managing negotiations on your behalf.
4. If I want to execute a 1031 Exchange, what do I need to know and what can I do to prepare for this process? What does this process entail?
If you are considering a 1031 exchange, your broker can assist you with this complicated process. A 1031 exchange is a tax-deferred exchange of certain type of property (such as commercial real estate), for a similar type of property. It allows the seller to defer payment of capital gains taxes until a later date, when the replacement property is ultimately sold.
The first step in preparing for this process is to identify a new property to purchase within 45 days of selling your current property, and then close on the purchase within 180 days. Remember, the new property needs to be similar to your original property. There are also specific rules regarding the use of a qualified intermediary and the handling of funds. However, utilizing a broker experienced in 1031 exchanges can help make the process seamless and hassle-free.
5. Why should I work with one broker exclusively to represent me as a buyer or tenant?
Choosing to work exclusively with one broker to represent you as a buyer or tenant can offer many advantages. This approach allows for greater personalization and focus, taking into consideration your individual needs and preferences. It also eliminates the possibility of conflicts of interest because the broker will only be representing you. Ultimately though, an exclusive partnership fosters a better understanding of your objectives and requirements, which can streamline the search process and lead to a more favorable outcome for all parties involved.
Looking for an Expert in the Chicagoland area?
Our experienced advisory team provides end-to-end services by working with you from introduction of market insight all the way through project delivery. If you have questions or inquiries, please contact a Cawley Expert today.