Archive for the 'Uncategorized' Category

12 Ways Poor Communications Can Damage Your Career

Have you ever truly thought about whether or not you are a good communicator?  No, I mean REALLY thought about it?  Do your customers and clients believe that you are a good communicator?  How do you know?  Have you ever asked them?  If you haven’t, then you may already have your answer to these questions.

When communicating with customers and clients, do you find yourself:

  • Returning calls when you have the time?
  • Not being fully prepared for meetings or conversations?
  • Punting when asked for your opinion?
  • Apologizing for having missed deadlines?

While you think about that for a moment, consider the list below, and ask yourself whether the people with whom you communicate would say you fall into the category of being “Great Communicator” or if you need to brush-up on your skills.

When communicating with people who are important to your career, do you:

  • Forward information and documents you receive, without reviewing them, without including guidance or a summary, and without your recommendations?
  • Create poorly written letters (lack of clarity, grammar, punctuation, relying too much on spell check, not even using spell check)?
  • Send emails that don’t make sense.  (Writing in text speak.  What? Are you 12 years old?!   Writing in email speak using run-on stream-of-consciousness sentences like you used to do 30 years ago when you first got email and leaving the reader to decipher what the hell you really mean).  Sure, everyone misses a typo now and then, even if they do re-read what they write and use their computer’s spell checker.  I’m not talking about simple mistakes.  I’m talking about writing in a stream of consciousness manner, where grammar, spelling, punctuation, and very often intelligent communication don’t exist.  Here’s an example of an email I recently received:

“don’t wana go im busy workig L8 mydeal meet tommrow at9a rchk”

This particular email is the type I’ve received from a particular business person over and over again.  On more than a few occasions I’ve had to write him back two or three times and/ or call him, saying I didn’t understand what he was trying to tell me.  In each case, doing that took time and caused me frustration, for what should have been a simple communication.  This selfish way of communicating forces the recipient to work too hard.  It forces people to make excuses for the writer’s mistakes, like “That’s just the way he sends emails…he’s really a good guy!”  Do you really want your clients having to make excuses to themselves or to others about anything you do?  I will only endure this kind of time-wasting communication because I know this particular guy.  He’s a nice guy and, I have to  make excuses when I get his emails.  I’m not his client.  If I were, it would be a short relationship!

What he was attempting to communicate was:

“I can’t join you for dinner tonight.  I am busy and will be working late.
I have an important deal meeting tomorrow at 9:00 AM.
Could I have a rain check?”

How much longer would that have taken him to write…30 seconds?  The fact that he didn’t take an extra few moments…just a FEW…not an eternity…to clearly communicate something as simple as the above, clearly tells me a lot about him.  Interestingly, this guy also complains a lot about the fact that his customers don’t respect him, won’t stand up for him, and don’t stay with him.  Hmm.  Is it any wonder?

Some people claim that they have different ways of communicating based on the needs of a given circumstance.  That’s bunk!  The above example was a business communication.  Do people like this only communicate more clearly and intelligently with their spouses and their children?  Despite such claims, people don’t easily turn switches on and off inside themselves. Human beings are creatures of habit.  Ten bucks say this guy communicates like this always and tries to explain it away.

How people communicate telegraphs a lot about them.  In this case, none of  it was good.  The message this guy sends to people who are important to his career includes:

1. His time is more valuable than other people’s time

2. He is inconsiderate

3. He may be disconnected (he doesn’t get what he’s doing wrong)

4. He may be distracted or disinterested

5. He seems to be ok with shifting his communication responsibility to others

6. He doesn’t get that poor communication can cause problems for himself and others (What would happen if an important client misinterpreted this guy’s poorly written communication and made a major decision in the wrong direction?)

7. He doesn’t understand that poor communications reflects badly on him and may suggest to others that he has limited intelligence, knowledge, etc.

8. People will expect him to communicate this way in the future, and may choose not to deal with him as a result

9. His poor communication leaves open the strong probability of misunderstandings, miscommunication, offending someone, inaccurate and incomplete information, and much more

10. One can expect that his formal documents may be equally unsatisfactory

11. His communication style is strongly indicative of his way of thinking, performing duties, his sense of responsibility, consideration for others, sense of fair play, entitlement, ability to function as part of a team, integrity, and so much more…

12. His way of communicating could embarrass and cause serious problems for himself, his clients, and others

Must we all write as did William Shakespeare?   Of course, not!  Clear and intelligent communication doesn’t require that much effort, and pays clear dividends to all involved.

So, would your clients say that you are a very good communicator?  How do you know?  Ask them. But, when you do, be certain to communicate your question clearly and intelligently, so they don’t misunderstand you.  :)

About Real Estate Strategies Corporation

Real Estate Strategies Corporation is a respected corporate advisory and transaction services firm that provides thought-leadership, decision-making, planning, project management, and transaction execution services to financial and senior executives at management team-led public, private, and portfolio companies, and not-for-profit organizations.  Under the leadership of its award-winning CEO, Andrew B. Zezas, RealStrat’s clients engage the firm when acquiring, disposing, renegotiating, or enhancing occupied leased or owned real estate in New Jersey, Pennsylvania, New York, Connecticut, and throughout North America. By creating and executing Business DRIVEN Real Estate Solutions and identifying hidden Opportunities, RealStrat drives greater operational and financial performance in support of its clients’ stakeholder objectives, M&A requirements, and exit strategies.

In the current economic environment, RealStrat’s efforts are focused on uncovering, capturing, and re-purposing hidden liquidity and minimizing risk in its clients’ leased and owned real estate.  The firm provides counsel as to competitive advantage strategies in preparation for the eventual economic recovery.  Visit www.RealStrat.com.

Read about timely commercial real estate issues at RealStrat’s blog at www.CorporateAdvisor.wordpress.com. Follow RealStrat at http://www.Twitter.com/RealStrat.

LINKS:

RealStrat News
Biographies
Articles
Properties
What Our Clients Say
AndrewZezas.com

For additional profiles, pictures, and more click here or go to http://realstratnews.wordpress.com/media-information/.

Copyright Real Estate Strategies Corporation 2011. All Rights Reserved.

###

Want to Know More About Customer Service? Rent a Car!

How many commercial landlords incorrectly consider themselves to be in the real estate business?  How many real estate brokers assume they’re in the business of leasing or selling properties?  They’re all wrong!  From a customer service perspective, both parts of the commercial real estate industry could take direction from the car rental business!

Recently, I flew to Oklahoma on business.  Prior to my flight, I arranged for a rental car to be available.  Since I had combined two business trips into one, I flew in from another city that required indirect flights.  So, after traveling all day long, when I finally landed late that night, the last thing I wanted was anything more that would keep me from getting some sleep.

As I got off the place, I walked through the terminal and arrived at the car rental area.  When I approached the car rental counter, I found a young man sitting behind the desk quietly with a smile on his face.  It was almost midnight, so the car rental area, and the airport itself, were both pretty quiet.  I dropped my bags and said: “I’m Andrew Zezas…I believe you have a car waiting for me?”  The smiley service representative stood up, said: “Good evening, Mr. Zezas. Your car is ready!”  He proceeded to give me very precise directions to the elevator that would take me to my car.  I picked up my bags, followed his directions, and when the elevators opened, I stepped off and saw the their booth just a few step in front of me.  I walked up to the booth and opened my mouth to speak, when the attendant said: “You must be Mr. Zezas!  Your car is right here.”  13 feet away from where I was standing was a just cleaned sparkling sedan with the engine idling, ready to take me to my hotel.  The attendant handed me my paperwork, and in what seemed like little more than 30 second, my bags were in the trunk, I met up with my colleague, and we were driving out of the airport.  How cool was that?  Sleep was only a short drive away!

Before I pulled off the airport property, a sensor on the dashboard told me that pressure in one of the tires was very low.  So, my colleague and I immediately returned to the rental booth.  I figured, sleep might have to wait a while.  The attendant saw us pull in and, before he even knew what the problem was, he couldn’t apologize enough.  He asked me how he could make up to us the terrible inconvenience his company had caused us.  Was he kidding?  Terrible inconvenience?  We drove for all of 87 seconds!  What terrible inconvenience?  This guy really meant it!  He couldn’t stop apologizing.

The attendant walked into his booth, and in under 3 minutes came out with keys to a brand spankin’ new SUV.  He said: “We’ve upgraded you two levels, as our way of apologizing.  Your car is right over there”.   Wow!  I walked over to the SUV, threw my bags in the back, and was overwhelmed with that new car smell that I can never get enough of.  When my colleague and I looked down at the dash, we both saw something neither of us had ever seen before.  Now, mind you, we each have been driving for more than 30 years.  What we saw amazed us.  The odometer read….3!  Not 300, not 3,000….just 3, little old miles.  This shiny, wonderful smelling, free upgraded SUV, had only been driven out of the factory, onto the trailer, and into the rental parking lot.  It had basically never been driven by anyone else other than the guys who built it and delivered it.  And, I would be the first!  Now, that was cool!

So, let’s count the surprises:

1. Smiley greeting at the counter

2. Greeting at the booth, which ws easy to find and close by

3. Car waiting next to the booth

4. 10 or 20 apologies

5. Under 3 minute car replacement

6. Free upgrade to a much larger and more comfortable vehicle

7. And, a vehicle that, if it was any newer, it would still be still steel ingots and petroleum!

Now, that’s what I call customer service!  You think I’ll rent from that company again?  You think I’ve told this story a bunch of times, and have encouraged my colleagues, clients, family, and friends to rent from them?  You think word of mouth travels fast?  You bet!

Landlords and brokers, errors happen in transactions and when providing service all the time.  Some are simple, honest mistakes, and others are major screw-ups, or worse.  When was the last time you provided seven surprises as a way of making your tenants and clients feel like they wouldn’t want to do business with anyone else ever again?

Send me your thoughts.

About Real Estate Strategies Corporation

Real Estate Strategies Corporation is a respected corporate advisory and transaction services firm that provides thought-leadership, decision-making, planning, project management, and transaction execution services to financial and senior executives at management team-led public, private, and portfolio companies, and not-for-profit organizations.  Under the leadership of its award-winning CEO, Andrew B. Zezas, RealStrat’s clients engage the firm when acquiring, disposing, renegotiating, or enhancing occupied leased or owned real estate in New Jersey, Pennsylvania, New York, Connecticut, and throughout North America. By creating and executing Business DRIVEN Real Estate Solutions and identifying hidden Opportunities, RealStrat drives greater operational and financial performance in support of its clients’ stakeholder objectives, M&A requirements, and exit strategies.

In the current economic environment, RealStrat’s efforts are focused on uncovering, capturing, and re-purposing hidden liquidity and minimizing risk in its clients’ leased and owned real estate.  The firm provides counsel as to competitive advantage strategies in preparation for the eventual economic recovery.  Visit www.RealStrat.com.

Read about timely commercial real estate issues at RealStrat’s blog at www.CorporateAdvisor.wordpress.com. Follow RealStrat at http://www.Twitter.com/RealStrat.

LINKS:

RealStrat News
Biographies
Articles
Properties
What Our Clients Say
AndrewZezas.com

For additional profiles, pictures, and more click here or go to http://realstratnews.wordpress.com/media-information/.

Copyright Real Estate Strategies Corporation 2011. All Rights Reserved.

###


Brokers Compensation is Performance Based…But, Who Must Perform?

I love it when some commercial landlords claim that the commissions they pay to commercial real estate brokers should be conditioned on whether a tenant performs or defaults under a lease.  Some landlords insist that they should not be required to make future commission payments if tenants default.  Some go so far as to demand reimbursement of commissions by real estate brokers when tenants default.

Many commercial landlords argue that commissions should be paid based on the value landlords derive when tenants pay rent.  Those landlords claim that if a tenant defaults in paying rent, then the landlord’s value is diminished, and the commercial real estate broker should somehow be responsible for that default and should not be entitled to its full compensation.

This is simply an issue where commercial landlords attempt to pass on their risk to real estate brokers, as a result of landlords not performing the due diligence necessary to protect their own interests.  Do landlords really believe that real estate brokers are capable of analyzing the financial abilities of commercial tenants?  Do landlords really expect brokers to act as credit analysts and insurers of tenant creditworthiness?

Sure, the compensation of commercial real estate brokers is performance based.  But, to who’s performance does that relate?  Not the tenant’s performance!  Real estate brokers are not compensated based on the performance of their tenants. That’s why most courts of law have found that a real estate broker’s commission is due when the lease is executed by landlord and tenant, not at the end of the lease after the tenant has performed its obligations. So, from a landlord’s perspective, a commercial real estate broker should be paid for its own performance, for “delivering” a tenant, not for what that tenant does or doesn’t do after the landlord has accepted the tenant and after the landlord has freely elected to enter into a transaction with that tenant.

In fact, a commercial real estate broker working on behalf of a tenant may receive payment from the landlord, who is, in turn reimbursed by the tenant for the cost of the broker’s compensation along with other costs through payment of rent.  So, because tenants reimburse landlords for real estate broker compensation, some courts of law have held that, in fact, it is the tenant that actually pays the broker’s commission.

The world has changed and business, especially commercial real estate, has become a riskier industry.  Companies that appear to be healthy may not be, or may become unhealthy and default on their obligations at a later date.  This puts more burden on commercial landlords, and the necessity for them to take greater steps to protect their interests has become even more important.  For the record, it is not only tenants that can become unhealthy….

The issue of whether landlords should place the burden of tenant default on the backs of commercial real estate brokers has been an on-going source of debate, both in this blog, in LinkedIn, and in the commercial real estate industry.  And, so long as some commercial landlords, not the best or strongest landlords, mind you, unfairly attempt to shift their obligations and risks onto commercial real estate brokers, unfortunately this discussion will continue.

However, as the commercial landlord industry consolidates and becomes more sophisticated, that out-dated mentality of “stick-it-to the-real-estate-brokers” appears to be fading away, as greater numbers of commercial landlords recognize the benefits they derive from commercial real estate brokers representing tenants and the commissions to which those brokers are rightfully entitled.

 

About Real Estate Strategies Corporation
Real Estate Strategies Corporation is a respected corporate advisory and transaction services firm that provides thought-leadership, decision-making, planning, project management, and transaction execution services to finance and senior executives at management team-led public, private, and portfolio companies, and not-for-profit organizations.  Under the leadership of its award-winning CEO, Andrew Zezas, RealStrat’s clients engage the firm when acquiring, disposing of, renegotiating, or enhancing occupied leased or owned real estate in New Jersey, Pennsylvania, New York, Connecticut, and throughout North America.  By creating and executing Business DRIVEN Real Estate Solutions and identifying hidden Opportunities, RealStrat drives greater operational and financial performance in support of its clients’ stakeholder objectives, M&A requirements, and exit strategies.

In the current economic environment, RealStrat’s efforts are focused on uncovering, capturing, and re-purposing hidden liquidity and minimizing risk in its clients’ leased and owned real estate.  The firm provides counsel as to competitive advantage strategies in preparation for the eventual economic recovery.  Visit www.RealStrat.com. Read about timely commercial real estate issues at RealStrat’s blog at www.CorporateAdvisor.wordpress.com.   Follow RealStrat at http://www.Twitter.com/RealStrat.

LINKS:

RealStrat News
Biographies
Articles
Properties
What Our Clients Say

Copyright Real Estate Strategies Corporation 2011.  All Rights Reserved.

###

11 Important Steps to Achieving Commercial Brokerage Success in 2011

Happy New Year!  It’s time to make your business resolutions for 2011.

Here are my recommendations to better serve your clients’ needs and to achieve your own realistic success in the coming year:

1. Determine which client types best fit your expertise and service offerings, and then focus the majority of your efforts on those sectors

2. Develop a business-centric approach to advising your clients and delivering real estate services

3. Customize your service model to one that achieves your target clients’ business objectives, while satisfying their real estate needs

4. Develop an approach to serving your clients that is transparent in all you do, with “Honesty is Our Only Policy!” as your motto

5. Make conflict-of-interest identification and resolution an integral part of your service offering

6. Be crystal clear in your compensation expectations to minimize confusion, especially if yours is a performance and risk based commission model

7. Always put the needs of your client first, without fail, so long as your client recognizes that you are entitled to fair, reasonable, and timely compensation

8. Resolve to agree to no compensation bonuses, but accept no discounts

9. Recognize that, as a service provider, you have your own business risks, and that your role does not include discounting, delaying, or risking your performance based compensation as a means of guaranteeing the creditworthiness or performance of either tenant or landlord

10. Negotiate on your clients’ behalf like you and your client don’t need any particular deal, that you have multiple alternatives, and that you’ll always walk away in the absence of a favorable, but reasonable transaction

11. Recognize that as a service provider and advisor, your only role is to protect your clients’ and satisfy their needs first, that your job is to maintain relationships that your clients permit you to have with them, and that without sustainable relationships with great clients you will not achieve your own success objectives, those of your company, or those of your clients.

Are there more important steps to take to achieve commercial brokerage success in 2011?  Let me know.

About Real Estate Strategies Corporation
Real Estate Strategies Corporation is a respected corporate advisory and transaction services firm that provides thought-leadership, decision-making, planning, project management, and transaction execution services to finance and senior executives at management team-led public, private, and portfolio companies, and not-for-profit organizations.  Under the leadership of its award-winning CEO, Andrew Zezas, RealStrat’s clients engage the firm when acquiring, disposing of, renegotiating, or enhancing occupied leased or owned real estate in New Jersey, Pennsylvania, New York, Connecticut, and throughout North America.  By creating and executing Business DRIVEN Real Estate Solutions and identifying hidden Opportunities, RealStrat drives greater operational and financial performance in support of its clients’ stakeholder objectives, M&A requirements, and exit strategies.

In the current economic environment, RealStrat’s efforts are focused on uncovering, capturing, and re-purposing hidden liquidity and minimizing risk in its clients’ leased and owned real estate.  The firm provides counsel as to competitive advantage strategies in preparation for the eventual economic recovery.  Visit www.RealStrat.com. Read about timely commercial real estate issues at RealStrat’s blog at www.CorporateAdvisor.wordpress.com. Follow RealStrat at http://www.Twitter.com/RealStrat.

LINKS:

RealStrat News
Biographies
Articles
Properties
What Our Clients Say

Copyright Real Estate Strategies Corporation 2011.  All Rights Reserved.

###

A Holiday Message from Andrew Zezas, SIOR, Real Estate Strategies Corporation’s CEO

Keeping a Relationship with Someone Who Already Screwed You

And, I Thought Screws Were Just Hardware!

In a recent conversation I had with a fellow commercial real estate professional, he asked me what I thought he should do about a recent business encounter.  Someone, who had an obligation to pay him a commission, utilized a technicality to pay him a lot less, in fact a fraction of what he owed. Then, to add insult to injury, that person elected to make minimal payments over an extended time period, without interest, despite having no contractual right to do so. After understanding more details of the circumstance, it appeared that the real estate professional’s interpretation was balanced and realistic. It was plain to me that he had been screwed by this person, and that, while the real estate professional may not have perceived the payor as a bad guy, the payor obviously was not interested in doing right by the real estate professional.  In my book, someone who avoids doing the right thing when the opportunity to do right exists IS a bad guy!

I didn’t find this question, nor the answer, to be overly complicated. My response was simple and obvious: I advised the real estate professional to pursue whatever business and / or legal remedies that were available to him, collect his money, and never ever do business with that person again…PERIOD!

To me, and to most people, there would be no other answer.  When someone has demonstrated that, while they didn’t necessarily do anything bad, if they have an opportunity to do the right thing, but don’t, for whatever they claim are their justifiable reasons or extenuating circumstances, in my book they move into the Bad Guy column.

Guess how this real estate professional responded to my recommendation? He said that he was really only seeking to understand how he might collect his compensation quicker. He went on to tell me about the importance of keeping relationships, and how he thought it was important to maintain his relationship with the person about whom he asked…the person who used a written document as justification not to honor his word, his commitment, nor his obligation to pay this real estate professional fairly based on the agreement between them, irrespective of the many months of hard work this professional expended, at risk, and despite the substantial value this person derived from those efforts.

I had to place my right hand under my chin and thrust upward to close my mouth, as my jaw dropped to my chest when I heard this.

I only had one question for the real estate professional: “Why?

Why would he want to maintain a relationship with someone who obviously does not care for him, apparently sees no value in their relationship, truly put his money where his mouth was in this case, and already damaged the real estate professional?

The real estate professional’s response was: “Because I might get other business from him.”

That sound you just heard was my jaw falling off!

 

About Real Estate Strategies Corporation
Real Estate Strategies Corporation is a respected corporate advisory and transaction services firm that provides thought-leadership, decision-making, planning, project management, and transaction execution services to financial and senior executives at management team-led public, private, and portfolio companies, and not-for-profit organizations.  Under the leadership of its award-winning CEO, Andrew B. Zezas, RealStrat’s clients engage the firm when acquiring, disposing, renegotiating, or enhancing occupied leased or owned real estate in New Jersey, Pennsylvania, New York, Connecticut, and throughout North America.  By creating and executing Business DRIVEN Real Estate Solutions and identifying hidden Opportunities, RealStrat drives greater operational and financial performance in support of its clients’ stakeholder objectives, M&A requirements, and exit strategies.

In the current economic environment, RealStrat’s efforts are focused on uncovering, capturing, and re-purposing hidden liquidity and minimizing risk in its clients’ leased and owned real estate.  The firm provides counsel as to competitive advantage strategies in preparation for the eventual economic recovery.  Visit www.RealStrat.com. Read about timely commercial real estate issues at RealStrat’s blog at www.CorporateAdvisor.wordpress.com.   Follow RealStrat at http://www.Twitter.com/RealStrat.

LINKS:

RealStrat News
Biographies
Articles
Properties
What Our Clients Say
AndrewZezas.com

Copyright Real Estate Strategies Corporation 2010.  All Rights Reserved.

###

Dear Mr. Landlord: We Both Know You’d Rather Deal Directly with the Tenant! Part One

Q&A on Tenant Representation with a Commercial Landlord
Part One of a Three Part Post

Most commercial landlords understand the role of tenant representation brokers and welcome the benefits they derive when tenant representation brokers properly educate and advise their tenant clients.  However, some landlords, mostly old-school diehards, continue to maintain very negative views of all things about the tenant representation process.   Some actually get offended by the very idea of a tenant representation broker.   Offended!?  What’s that about?

In a recent Q&A conducted via email with a prominent commercial landlord, I had the opportunity to hold a completely frank and open discussion about his views about tenant representation brokers.  And, while some of the conversation was challenging at times, both of us came away having learned from each other.

I invited the commercial landlord to provide me with his views on tenant representation, tenant representatives, and how he’d prefer to conduct the business of leasing his properties.  The conversation got so good, that it took me three posts to include it all.  Be sure to read all three posts over the next three weeks!  Following is Part One that dialogue:

1. Landlord: I would prefer to deal directly with tenants and to apply my creative deal making abilities to solve their problems, without having to work through tenant representatives.

RealStrat’s Response: In a world where transparency, disclosure, conflict-of-interest, and Sarbanes-Oxley are commonplace, for all but a few companies, it would be next to impossible for them to rely on recommendations made by transactional opponents, without having the benefit of advice and representation from third-party advisors whose job would be to protect their interests.

Additionally, professional landlords recognize the benefits of dealing with tenants who have been educated as to market conditions and properly prepared by their advisers, especially when those tenants are organized, ready, and perhaps pre-approved to make a deal.

2. Landlord: I view tenant representatives as obstacles.

RealStrat’s Response: Guess what? That’s precisely why many tenants engage tenant representatives (also known as corporate advisors).  To state the obvious, landlords benefit from higher rents, lower allowances and incentives provided to tenants, and more square feet leased for longer terms.  Tenants benefit from lower rents, higher allowances and incentives provided by landlords, the right amount of square feet and a length of term that best supports their business objectives.  Given the opposing position between landlords and tenants,  tenants see one of the many important roles of their advisors is that of a knowledgeable gatekeeper, and at times, and somewhat of an obstacle to keep the landlord from going in the wrong direction.

3. Landlord: Tenant representatives make deals more complicated.

RealStrat’s Response: Many tenants have complex business requirements that demand creative solutions. When it comes to satisfying a tenant’s operational or financial objectives, keeping it simple…the right approach in many instances…may not always be possible.

4. Landlord: I don’t like paying commissions to brokers who don’t represent me and who negotiate against me.

RealStrat’s Response: That’s interesting, because actually, tenant representatives would prefer not to be paid by their clients’ opponents.  Receiving payment from a landlord when representing a tenant makes things very complicated for tenant representative brokers.  Few industries handle compensation in a manner similar to that of commercial real estate, where the tenant’s advisor is most often paid by the landlord, the tenant’s transactional opponent.  By changing industry compensation practices, this challenge could be eliminated.  Because it remains the norm, most tenants prefer that landlords bear this responsibility.  So, until that change occurs, landlords and tenant representatives are stuck with each other as it relates to compensation.

Stop by next week to read Part Two of this three-part post.


About Real Estate Strategies Corporation
Real Estate Strategies Corporation is a respected corporate advisory and transaction services firm that provides thought-leadership, decision-making, planning, project management, and transaction execution services to financial and senior executives at management team-led public, private, and portfolio companies, and not-for-profit organizations.  Under the leadership of its award-winning CEO, Andrew B. Zezas, RealStrat’s clients engage the firm when acquiring, disposing, renegotiating, or enhancing occupied leased or owned real estate in New Jersey, Pennsylvania, New York, Connecticut, and throughout North America.  By creating and executing Business DRIVEN Real Estate Solutions and identifying hidden Opportunities, RealStrat drives greater operational and financial performance in support of its clients’ stakeholder objectives, M&A requirements, and exit strategies.

In the current economic environment, RealStrat’s efforts are focused on uncovering, capturing, and re-purposing hidden liquidity and minimizing risk in its clients’ leased and owned real estate.  The firm provides counsel as to competitive advantage strategies in preparation for the eventual economic recovery.  Visit www.RealStrat.com. Read about timely commercial real estate issues at RealStrat’s blog at www.CorporateAdvisor.wordpress.com.   Follow RealStrat at http://www.Twitter.com/RealStrat.

LINKS:

RealStrat News
Biographies
Articles
Properties
What Our Clients Say
AndrewZezas.com

Copyright Real Estate Strategies Corporation 2010.  All Rights Reserved.

###

Hire a Broker to Negotiate a Relocation, But Negotiate a Renewal On Your Own…You’re Kidding, Right?

Hire a broker to negotiate a relocation, but negotiate a renewal on your own?  That’s like hiring a dentist to work on only some of your teeth!  What benefit could you derive from that?

When a commercial tenant contemplates relocation or renewal, some landlords will suggest that the tenant engage a real estate advisor, but only to negotiate transactions outside of their current building.  In these instances, the landlord will typically recommend that landlord and tenant negotiate directly on a renewal or other in-place transaction.  This approach is designed to favor the landlord and removes from the tenant the benefit of expert advice and representation it would receive from an advisor on an in-place transaction.  Such an approach also changes the role of the advisor from an objective representative of the tenant, one who has no preference or incentive to sway the tenant toward any particular property or transaction (other than the one that best meets the tenant’s objectives), to that of a salesman who would only be compensated in the event the tenant elected to relocate.

Landlords will suggest that to preserve the relationship, landlord and tenant should negotiate directly.  That’s exactly why a tenant needs an advisor, so the tenant advisor can secure the terms to which the tenant is entitled and, at the same time,  preserve the tenant’s relationship…that is, if a relationship with the landlord is important. 

Other landlords will suggest that by negotiating directly, the landlord won’t have to compensate a tenant advisor, so the tenant’s occupancy costs will be reduced.    Not quite!  In fact, an advisor’s role is to drive down the tenant’s occupancy costs, despite the fact that a commission would be paid.

If the tenant agreed to deal with its existing landlord directly, such action would telegraph to the landlord that the tenant really planed on staying in the landlord’s building.  It would stack the odds in favor of the current landlord and eliminate most, if not all, of the constraints and pressure placed on the landlord through a competitive bidding process.  Moreover, the tenant would lose the objectivity it would otherwise derive by engaging an advisor to provide counsel and to protect its interests across all transactions.

In fact, the presence of a tenant advisor actually benefits the landlord while serving the tenant’s needs.  A knowledgeable advisor, objectively evaluating the implications to the tenant of all alternative transactions, including those  proposed by an existing landlord, could more appropriately guide the landlord as to how to make a deal with the tenant.

Do most tenants engage real estate advisors only to negotiate  relocation transactions, while negotiating on their own with their current landlords?  Not really.  Frankly, if a commercial tenant has the know-how, time, resources, and inclination to negotiate a transaction without an advisor, then it should do that for all transactions, whether relocation or renewal.  Otherwise, if the tenant elects to engage an advisor at all, it should give serious consideration to engaging that advisor across all transactions it may consider, to ensure continuity and objectivity, and to secure the optimal terms, wherever the tenant elects to land.

About Real Estate Strategies Corporation
Real Estate Strategies Corporation is a respected corporate advisory and transaction services firm that provides thought-leadership, decision-making, planning, project management, and transaction execution services to financial and senior executives at management team-led public, private, and portfolio companies, and not-for-profit organizations.   Under the leadership of its award-winning CEO, Andrew B. Zezas, RealStrat’s clients engage the firm when acquiring, disposing, renegotiating, or enhancing occupied leased or owned real estate in New Jersey, Pennsylvania, New York, Connecticut, and throughout North America.  By creating and executing Business DRIVEN Real Estate Solutions and identifying hidden Opportunities, RealStrat drives greater operational and financial performance in support of its clients’ stakeholder objectives, M&A requirements, and exit strategies.

In the current economic environment, RealStrat’s efforts are focused on uncovering, capturing, and re-purposing hidden liquidity and minimizing risk in its clients’ leased and owned real estate.  The firm provides counsel as to competitive advantage strategies in preparation for the eventual economic recovery.  Visit

Acquire new ideas about commercial real estate at RealStrat’s blog at http://www.CorporateAdvisor.wordpress.com.   Follow RealStrat and Andrew Zezas at http://www.Twitter.com/RealStrat.

Check out The Executive’s Guide to Understanding Corporate Real Estate Transactions.

Copyright Real Estate Strategies Corporation 2010.  All Rights Reserved. 

###

Soon To Be In Foreclosure!

You’re not going to believe this story…in this economy…in this real estate market!  I almost can’t believe it myself!  This is real time stuff that  happened to me.

To set the stage, my client is a growing company that is led by a very bright CEO.  He’s young, aggressive, extremely accomplished, highly successful, hard-working, respectful, and takes no prisoners.  He’s a straight shooter who respects straight shooters.  

The tenant occupies office space in a suburban New Jersey building, which is owned by an out-of-state landlord.  This particular landlord promotes the stereotype of the mean and nasty commercial landlord, that dwindling minority of the industry that tries all they can to dominate every tenant and every deal.  This landlord, a cheap suit wearing an open collar, gold chain, and way too much cologne,  demonstrated himself to be arrogant, condescending, self-absorbed, not too bright, somewhat successful despite himself, probably a front man for other people with real money, and based on his antics, someone who still thinks he’s in a landlord’s market where tenants should pay homage to him and be grateful to be occupying his building.  Based on how this landlord handled himself, he is a very strong candidate for president of the local bread line.
Here’s the abridged version of what happened.  You’ll get a kick out of it!
  • Our client, the tenant, sought to renegotiate its existing lease based on current market conditions, or to relocate to another building
  • Our client had uncomfortable dealings with the landlord in the past
  • We submitted an RFP to the landlord’s agent and provided specific guidance as to our tenant’s requirements
  • The landlord’s agent called us with a precise message from the landlord, one that I have never received before:  “The landlord said if you play ball with him, he’ll pay you a commission.  If you make it tough for him, he’ll only pay you half!”  Wow!  How to win friends and influence people!  Was the landlord trying to intimidate us, create a conflict-of-interest, or just bring us over to the dark side?  We advised our client of the conversation.
  • Despite our guidance, the landlord submitted a proposal that was extremely one-sided and did not address our client’s requirements
  • The landlord attempted to circumvent us and meet with our client directly
  • Our client authorized us to arrange a meeting with the landlord, which we did
  • The landlord rescheduled the meeting twice and then swaggered-in 45 minutes late
  • During the meeting, the landlord was disrespectful to our client, speaking down to both the CEO and the President, as well as, to his own agent
  • The landlord arrogantly spoke to me, and after realizing that he was not the most important person in the room and wouldn’t get his way, waved his arms, got up and stormed out
  • Despite our email and voicemail requests for a revised landlord proposal, weeks passed without a reply
  • I finally go the landlord’s agent on the phone one evening, when he sheepishly told me he was not authorized to respond, but didn’t want me to tell that to the tenant…Huh?
  • We received an email directly from the landlord saying we were an impediment (To what…his ability to take advantage of our client?), and telling us that he instructed his agent not to deal with us ever again (Really?  So, I should not bring my next 100,000 sq ft tenant to your building?)
  • Our client said good riddance and instructed us to make a deal elsewhere
  • Our client will be moving into their new facility shortly
  • Oh, and did I mention that the landlord’s building is a 60% vacant class B building that sits way out beyond the western fringe of the central New Jersey market, where very little demand exists even in good times?

Anybody want to buy an office building…cheap?

Real Estate Strategies Corporation is a respected corporate advisory and transaction services firm that provides thought-leadership, decision-making, planning, project management, and transaction execution services to financial and senior executives at management team-led public, private, and portfolio companies, and not-for-profit organizations.   Under the leadership of its award-winning CEO, Andrew B. Zezas, RealStrat’s clients engage the firm when acquiring, disposing, renegotiating, or enhancing occupied leased or owned real estate in New Jersey, Pennsylvania, New York, Connecticut, and throughout North America.  By creating and executing Business DRIVEN Real Estate Solutions and identifying hidden Opportunities, RealStrat drives greater operational and financial performance in support of its clients’ stakeholder objectives, M&A requirements, and exit strategies.

In the current economic environment, RealStrat’s efforts are focused on uncovering, capturing, and re-purposing hidden liquidity and minimizing risk in its clients’ leased and owned real estate.  The firm provides counsel as to competitive advantage strategies in preparation for the eventual economic recovery.  Visit www.RealStrat.com.

Acquire new ideas about commercial real estate at RealStrat’s blog at www.CorporateAdvisor.wordpress.com.   Follow RealStrat and Andrew Zezas at http://www.Twitter.com/RealStrat.

Check out The Executive’s Guide to Understanding Corporate Real Estate Transactions.

Where is Andrew Zezas?

 

Copyright Real Estate Strategies Corporation 2010.  All Rights Reserved. 

###

Do Commissions Create Conflicts for Tenant Representative Brokers?

Traditional real estate commissions, based on a percentage of rental income or sale value of a transaction, work very well when brokers represent landlords, sublandlords, and sellers.  In those instances, their objectives and those of their brokers, are completely aligned.  The higher the price, the higher the commission.  See…that works perfectly!

But, what about the tenant representative broker and the corporate advisor, whose job is to protect the interests of the tenant or buyer?  In this case, the primary objective of the tenant representative broker is very often to reduce occupancy costs.  In most cases, tenant representative brokers are paid commissions based on the same percentage of rent standard as  brokers representing landlords and sellers…the higher the price, the higher the commission!

Does that work?  Is that right?  Don’t traditional commissions based on percentages put the tenant representative broker in a position of being in conflict with his / her own client?   Moreover, since most commissions are paid by the landlord, even those payable to the tenant representative broker, doesn’t that pose additional conflicts for the tenant and tenant representative broker relationship?  Afterall, doesn’t being the one who pays the tenant representative broker  give the landlord undue influence over the how the tenant representative broker might perform on behalf of his / her client?

In many instances, commissions paid to tenant representatives can be substantial.  Despite the ability to mitigate the potential for conflicts of interest, tenants are very often hesitant to accept the responsibility of cutting a check for large sums, especially when they haven’t done so in previous transactions.

Rent and other financial components are not the only points of commercial real estate transactions that tenant representative brokers address.  Given that fact, how can they charge for the true value they create in a manner that is both aligned with the objectives of their tenants and will result in fair compensation to them?   Any thoughts?

Real Estate Strategies Corporation is a respected corporate advisory and transaction services firm that provides thought-leadership, decision-making, planning, project management, and transaction execution services to financial and senior executives at management team-led public, private, and portfolio companies, and not-for-profit organizations.   Under the leadership of its award-winning CEO, Andrew B. Zezas, RealStrat’s clients engage the firm when acquiring, disposing, renegotiating, or enhancing occupied leased or owned real estate in New Jersey, Pennsylvania, New York, Connecticut, and throughout North America.  By creating and executing Business DRIVEN Real Estate Solutions and identifying hidden Opportunities, RealStrat drives greater operational and financial performance in support of its clients’ stakeholder objectives, M&A requirements, and exit strategies.

In the current economic environment, RealStrat’s efforts are focused on uncovering, capturing, and re-purposing hidden liquidity and minimizing risk in its clients’ leased and owned real estate.  The firm provides counsel as to competitive advantage strategies in preparation for the eventual economic recovery.  Visit www.RealStrat.com.

Acquire new ideas about commercial real estate at RealStrat’s blog at www.CorporateAdvisor.wordpress.com.   Follow RealStrat and Andrew Zezas at http://www.Twitter.com/RealStrat.

Check out The Executive’s Guide to Understanding Corporate Real Estate Transactions.

Where is Andrew Zezas?

Copyright Real Estate Strategies Corporation 2010.  All Rights Reserved. 

###


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THIS WORK IS DESIGNED TO PROVIDE PRACTICAL AND USEFUL INFORMATION ON THE SUBJECT MATTER COVERED AND REPRESENTS THE OPINION OF THE AUTHOR. HOWEVER, IT IS PROVIDED WITH THE UNDERSTANDING THAT THE AUTHOR IS NOT ENGAGED IN RENDERING LEGAL, FINANCIAL, ACCOUNTING, OR OTHER PROFESSIONAL ADVICE TO THE READER. IF LEGAL, FINANCIAL, ACCOUNTING, OR OTHER PROFESSIONAL ADVICE IS REQUIRED, THE SERVICES OF A COMPETENT PROFESSIONAL SHOULD BE SOUGHT. THE AUTHOR SPECIFICALLY AND EXPRESSLY DISCLAIMS ANY LIABILITY THAT MAY BE INCURRED AS A RESULT OF THE USE OR APPLICATION OF THE INFORMATION THAT IS CONTAINED IN THIS WORK.

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