Instincts and Communication Win the Day!

A broker friend of mine from the Chicago area recently had a client who was incredibly busy, often too immersed in growing its business to fully focus on its real estate project, even though the client knew that its real estate project was important to its continued success.

Throw in a few everyday business challenges, a horrible economy, and a couple of summer vacations, and you can imagine how tough it might have been for this very attentive and experienced broker to keep his client’s real estate project on track.

As the broker strove to build momentum in the transaction, the client wasn’t making important decisions and milestones weren’t being achieved.  This took place while the project was still in its early stages and even though the client confirmed its desire to complete a deal.

The broker struggled to understand why, after being in the business for over two decades and after advising hundreds of clients, he couldn’t corral this one single client and move this project forward. So many questions entered his mind, including:

  • Was the client still just too busy?
  • Were they having second thoughts about proceeding with the project?
  • Had something drastic happened in their business?
  • Was the client’s company being acquired?
  • Were they being sued?
  • Were they talking to other real estate service providers?
  • Had they succumbed to the landlord’s constant attempts to deal with them directly, in order to disintermediate the broker and increase its own profits?

The broker went over and over all of the various reasons why he couldn’t bring his client’s project forward, struggling to understand why.  He reminded himself of the rock solid representation agreement between he and his client, so he wasn’t concerned about other brokers or even the landlord getting in his way. But, what could it be that was keeping this deal stuck in the mud?

And, then it happened…the “aha!” moment. The broker instincts kicked-in when he realized that the executives with whom he was dealing had little experience in completing real estate transactions.  What if they didn’t understand how something, a deal component perhaps, is supposed to work?  What if they misunderstood some of his guidance?  What if they were concerned about risk, excessive costs, or other terms that, because of their inexperience in commercial real estate, they misinterpreted as becoming their burden?  What if they were unaware about how the broker would deal with some or all of those issues, which obligations they’d have to bear, and which would fall to the landlord?  What if, because their project’s foundational objectives were cost containment and reduction, they thought the project would be too expensive because they misinterpreted the details? What if, like too many seasoned and accomplished executives the broker had dealt with in the past, these executives were too embarrassed to say they didn’t understand or were to egocentric to admit that they didn’t know how a real estate project was supposed to work? What if? What if? What if?

Wow! Could it really be that simple! Could it be that the stalling, the delays, the inactivity, and the complete lack of momentum resulted only from simple miscommunication or misunderstanding?

The broker trusted his instincts and called his client. His opening line was: “I’d like to review how the landlord will probably bear most of the financial burden and risk in your proposed transaction.” Was he ever right on target! Despite the detailed written report the broker provided his client that explained how the transaction would be structured, his client incorrectly thought it would have to bear most of the financial burden. And, the senior executive, a bright and intelligent guy, was too embarrassed to ask. Go figure!

Guess what? The project is moving forward now at an appropriate pace. The broker expects to wrap-up a deal shortly that will greatly reduce his client’s costs and improve its operating efficiency, thereby exceeding the client’s original objectives. And, the client will bear few, if any, transaction costs.

It wasn’t the terms or the broker that held-up the deal. It was simply human nature, a missed communication by the client, a a little bit of ego that was getting in the way. Strong instincts, experience, and proactive communications often win the day, and go a long way in successfully advising tenant clients!  In this case, that’s exactly what they did!

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.

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1 Response to “Instincts and Communication Win the Day!”


  1. 1 Geoffrey Kasselman, SIOR August 28, 2009 at 2:35 pm

    Can I hire this broker? Where can I find him or her?


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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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