Exactly, How Transparent Are You?

As a commercial real estate broker, you probably consider yourself to be professional, fair, open, and honest.  Are you also transparent? Completely?  Follow these questions and comments and decide for yourself just how transparent you are and whether your clients view you the same way.

• Can you describe the basic principles behind Sarbanes-Oxley?

• Do you tell clients and prospects that you will be transparent in your dealings with them and on their behalf?

• Are you really transparent in your dealings, or is that just marketing hype?

• Do you keep your tenants and buyers informed about your dealings on their behalf and about the compensation to which you may be entitled when they complete their transaction?

• Do you only mention compensation to your tenant clients when a landlord offers you a discount, an unacceptable rate, or payment schedule that takes too long or puts you at risk?

• Do you also inform your clients when landlords offer you compensation bonuses or incentives?

• Do you disclose relationships to your clients that THEY may see as being in conflict with your ability to properly serve their interests, even if you don’t see the same conflicts?

• Are you really completely transparent?

• Are your company’s relationships so vast and geographically dispersed that it is often difficult to understand the many possible conflicts-of-interest that may exist, let alone identify and report them to your clients?
• Are you transparent with your transactional opponents and competitors?  Should you be?

Being transparent is not a buzz word, it’s an absolute, a must in business. You cannot be transparent on some issues, and not on others, and then claim to be transparent.  That’s being partially transparent, which means you’re not really transparent.  Either you’re transparent or you’re not!

Being transparent in your dealings is not that tough.  What are you afraid of?  Do you think your clients will figure out that maybe you’re not as good as you said you were?  Are you afraid that if you are transparent about your compensation that your clients may want some of it?  If you are truly concerned about this, then perhaps you should ask yourself if you really are worth what you expect to receive in compensation…if you deliver sufficient value to your clients, so that they will recognize your worth and entitlement to fair compensation.

Are you afraid to disclose that a landlord offered you a compensation bonus? Why? Do you deserve it?  Will accepting it have a negative impact on your client?  Would your client think so? Would your client be concerned that you didn’t disclose it?  If, for some silly reason, you chose not to disclose an offer of a bonus, what a tremendous opportunity you missed to build a stronger relationship with your client

If you don’t create a lot of value for your clients, if you’re merely an old-fashioned real estate space jockey, doing little more than driving your clients around the market, dropping them on a landlord’s doorstep and expecting to pick-up a check when the landlord completes your client’s deal, then you SHOULD be nervous!  While you’re still providing a service and are entitled to be paid, you’re probably not entitled to the same compensation as a true professional real estate broker or advisor who helps his/her clients plan and negotiate complex transactions and provides superior service to them.  Like in any other business, if you’re in it for a quick hit and provide minimal service and value, you should expect to be compensated in a similar fashion, and frankly, in a lesser amount than your competitors who really deliver!

Wouldn’t it be great if your clients backed you up when it came time for you to be paid?  Yours won’t?  Why not?  Could it be that you haven’t been transparent, that they don’t trust you or don’t believe that you are worth the amount of compensation you seek?  Your relationship with your clients, and how your compensation is treated, can’t be one way.  If you choose not to accept discounts, then don’t accept bonuses.  State your compensation requirements to your clients at the outset of your engagement. Inform them that you don’t accept bonuses, and neither will you accept discounts. When a landlord or seller offers you a bonus, tell them you must inform your client (that tells the opposition you can’t be bought), then tell your client!  $10 bucks says that, so long as you provide your clients with stellar service, every once in a while, your clients will let you keep those bonuses. If not, then by your transparent disclosure, it will be the best investment in your relationship with that client that you could ever make! You’ll also likely find that your clients will support you when a transactional opponent attempts to under-pay you or tries to put your compensation at an unfair risk.

If a rogue landlord attempts to force you to accept a compensation amount or structure that is less than you would ordinarily accept, advise the your client, and let the landlord know you intend to do jus that.. Many tenants won’t feel comfortable with a landlord who attempts to under-pay their real estate advisor, as they often see that as a sign that the landlord will be unfair to them, and will likely under-fund or under-deliver for them, too.  Ask your client to support your efforts to secure fair compensation.  If your client recognizes the value you’ve created for it, they’ll back you up almost every time!

Heck! Even if you don’t get to keep a landlord offered bonus, think of all the incredible goodwill you’ll create with your client, your ability to deflate the opposition’s intent on swaying your negotiating strength by “buying you off”, how much stronger you’ll be in negotiating on your client’s behalf, the additional concessions you’ll likely secure on your client’s behalf, the strengthening of your reputation, and the future credibility and additional business opportunities you’ll likely get from the client who knows he can trust you…even with cash!

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 2011.  All Rights Reserved.

###

Welcome to the Men’s Room

Why commercial real estate brokers insist that tenants look at the office building men’s rooms when presenting space for relocation is a bit peculiar.

Don’t landlords know that people look at restrooms? As a result, don’t most landlords pay extra attention and keep them clean, even if they might not properly maintain other parts of their buildings?

I guess office building men’s rooms are like getting your signature notarized.  One only has a problem when you cannot get your signature notarized or when the men’s room is not clean and orderly.

Certainly, a clean men’s room should suggest the environment in which a company’s employees would work. However, is it really a true indicator of the quality of a building and how well it is maintained and managed?  What about the building’s financial circumstance and that of its landlord?

In challenging economic times where good companies work diligently to avoid financial collapse and good landlords find it difficult to attract new tenants and retain existing ones, a well-maintained building suggests that the landlord may, in fact, be focused on more than just protecting its investment. However, essential to determining the long-term viability of any potential real estate transaction is a thorough investigation of the physical condition of any property under consideration, as well as, a detailed review of the landlord’s ability to perform, not only operationally, but financially in accordance with the intended terms of a lease.

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. 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 2011.  All Rights Reserved.

###

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.

###

Always Cut Your Commission!

Yeah, that’s right!   “Always Cut Your Commission!”  And, why not?  If the only value you can offer your clients is your price, then you probably will have to cut your commissions to stay in business!

Actually, let’s clarify what is often referred to as “Commission Cutting.”  It simply means that one broker is willing to sell his or her services at a lower rate than he or she would for other projects, or perhaps in comparison to his or her competitors.  So what?  Does that mean every one in the local market must sell their services at the same price?  If you buy shoes from one store at a low price, does that mean that all of the other shoe stores will lose all of their customers and go out of business, just because you got a good deal?

Just like in other industries, there exist many common practices in commercial real estate, including those surrounding broker compensation.  But, no “standard” compensation or commission structure exists.  In fact, in most states, setting commission standards is considered price-fixing, and is illegal!

So, what’s all this noise about brokers who cut their commissions and how that supposedly affects the compensation of other brokers?  The response I often hear is that if one broker offers low-priced services then every landlord, tenant, buyer, and seller in that market will make the same demands.  Really?  Well, guess what?  They already want your services at the lowest possible price.  Shouldn’t they?  Don’t you want to buy those shoes as inexpensively as possible?  Don’t you negotiate for a lower price when you buy or lease a car?  Didn’t you negotiate when you bought your home?  Did everyone else get their home for the same price you did?  Of course not!  Seeking a lower price is the American way, and there isn’t a darned thing wrong with it.

Ask yourself these questions:

• Are you a low-cost service provider?
• Is low-cost always the winner?

NO!  If that were true, there would not exist high-priced hotels, restaurants, resorts, clothes, homes, cars, etc., etc., etc., or anything of better quality.  If low price always won, consumers and businesses would never buy the best quality or engage the best of any service provider.  Instead, they would only hire the cheapest.  And, in those instances, they’d get what they paid for.

Forget what other brokers do.  There is plenty of room in every industry for low-cost service providers, because some clients do make purchasing and hiring decisions purely on cost.  Low cost, almost always means low quality, and those who hire only on a low-cost basis typically receive services commensurate with what they pay.  And, if that’s their preference, so be it!

The answer here is very simple:  If you are a low-cost service provider, be the best one in your market.  If, on the other hand, you wish to be something other than low-cost, make sure that like Mercedes, BMW, Nobu, Gucci, and other fine products and service providers, you provide your clients with such incredibly valuable services, experiences, and outcomes, that your other-than-low-price will be warranted and you will be in demand!

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.

###

Has Your Wife Inspected the Building Yet?

In a recent industrial lease transaction, how the deal came to a close was not only unusual, but very telling about the direction of the current economy.  A privately held company negotiated with a commercial landlord to occupy a full building in a prominent and well-located industrial park in central New Jersey.   The landlord had an excellent reputation for quality designed and solidly constructed buildings, for maintaining high service levels, and for sticking to his word.  However, the landlord’s buildings were also known to be priced higher than his competition.

The landlord, a very astute and respected business man, had recently gotten very aggressive in lowering rents in an effort to attract more tenants and fill his buildings’ vacancies.  Nonetheless, his rents were still higher than many of his competitors.

In this particular negotiation, the landlord offered extremely flexible terms and an annual rental rate that was one of the lowest he had offered in the last eight years.  After weeks of back and forth, the tenant’s CEO informed the landlord that the company would not accept his terms, and that the company decided to lease a building of similar quality located twenty minutes further south.  The CEO said that the building they had chosen was less expensive, and that given current economic challenges, the spread between rents for the two buildings was significant enough that he could not pass up the additional savings.  He told the landlord that his company made its decision a week earlier and that its lawyers were already deep into lease document negotiations.  The CEO was a candid guy, so the landlord took him at face value and correctly assumed this was not a negotiating ploy.

Disappointed for having worked so hard to land the tenant, the landlord knew he couldn’t win them all.  The landlord confirmed for the CEO that he had truly offered all he could, and wished the tenant well.  The CEO stated that even if the landlord had offered more, he did not expect the central New Jersey building to be able to match the lower rents at the selected building.  So, they parted, saying they each hoped to do business together again some.

That weekend, the CEO was driving through central New Jersey with his wife on his way to a social function.  Since his wife had heard so much from him about the intense building negotiations, the CEO decided to drive her past the two buildings, both the one to which the company planned to relocate and the central New Jersey building he’d decided not to lease.

After driving around the central New Jersey building and sitting in front for a few moments, the wife, who rarely involved herself in her husband’s business affairs, told her CEO husband that he was nuts for passing-up the central New Jersey building.  She told him that she thought he’d made a mistake, and that the building offered an image that was far more impressive than anything else she’d seen.  From what the CEO told her, the central New Jersey building offered a giant leap in functional design, in comparison to the company’s current facility and the one the CEO selected.  She said that the building he had chosen could not compare, that his company would have benefited considerably more by moving its employees and operations to the central New Jersey building, and that the company would likely have become more profitable and able to significantly elevate its own image had it chosen the central New Jersey building.  Wow!

The CEO’s wife was right, and he was convinced!  First thing Monday morning, the CEO called the central New Jersey landlord and agreed to close the deal, despite the additional rental cost for the central New Jersey building.  The CEO realized that given the terms offered by the landlord, he would basically get a BMW quality building for the price of a Chevy.  He knew that, despite the continued economic doom and gloom heralded by the media, a good deal would still be a good deal.  Moreover, the CEO, obviously an intelligent business man, recognized that the lowest cost deal, even if it is less than the cost of a Chevy, while often attractive, is not always the best deal.  He understood that value could be derived, and success could be achieved, in multiple ways, other than through mere cost reduction.

When companies begin to return to rational thought, as in the case above, a circumstance that has lately been repeated again and again, you can be assured that such activities are the true signs that the recovery is gaining traction.  And, when your wife tells you that your company would be better off by taking a particular action, you may want to listen closely.

What unusual circumstances have surrounded your projects?

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.

###

11 Intelligent Strategies to Win With Your Clients in 2011!

As this funky worldwide economy claws its way up from the depths of financial hell, your clients need your expertise more now than ever before. Alas, “business as usual” is no more.  Your clients will need your knowledge, creativity, and your resources on new and multiple levels, so that they can achieve their objectives.  After all, your clients’ success is your success!

Here are 11 strategies for 2011:
1. Be Patient. Even your most sophisticated clients are working to figure things out, too

2. Advise First, Worry About Transactions Later. As the economy recovers, albeit slowly, your clients need guidance about viable real estate alternatives that will support multiple paths to business growth, change,
exit, and otherwise

3. Provide Business Advice, Not Just Real Estate Services and Information.
If your clients are not in the real estate business, they will benefit by your ability to distill real estate into their language

4. Be Transparent. Nothing ruins a trusting relationship quicker than an unspoken concern over whether a service provider or advisor has competing or conflicted interests

5. Push Communications. Keep your clients advised and sufficiently informed, never permitting them to wonder about the status of their project

6. Give It To Them Straight…They Can Take It! Your clients need uncensored, unembellished, honest, timely, and pertinent business intelligence, whether they like the outcome or not. Only then, will they be armed to make informed decisions

7. Manage Market Stress. Never let a client enter into a transaction without guiding them to conduct proper due diligence on their transactional opponents.  In this challenging economic environment, many companies are not what they seem

8. Go! Fight! Win! Drive hard and  negotiate aggressively to achieve your clients’ objectives. Now is the time to achieve greatness on their behalf. But, know when you’re on the goal line

9. Bend, But Don’t Break. This year especially, your clients will require assistance in areas that may be new to you. Be flexible and expand your offerings. But, know your boundaries and limitations

10. Information is Powerful. But, the knowledge and skill to  intelligently interpret, plan, and execute is the path to success

11. Stay Close. Your clients’ needs will change and then, change again. If they recognize your value, accept the responsibility to maintain those relationships

If nothing else, 2011 promises to be an interesting, and likely an exciting year.  You can either watch from the sidelines or lead your clients to victory!  Good Luck!

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.

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6 Critical Steps to Protect Your Commissions in a Challenging Market

The compensation of most commercial real estate brokers is performance based, especially in lease transactions.  When real estate brokers perform, they are entitled to receive their compensation. Yet, too many seasoned brokers put their compensation at risk, too often.

Follow these six simple, but critical steps to protect your commissions, and to ensure that you’ll be paid fairly, in-full, and on-time.

Step 1. Speak Up!

As early as possible, discuss your compensation requirements with both your tenant – client and any landlords with whom your client may consider entering into lease negotiations.  That means at your first meetings, before your prospective client actually becomes your client, and at your first landlord meetings, advise them how you expect to be compensated, how much, and why.  Advise them that your compensation is performance based…based on YOUR performance in bringing about an executed lease, not based on the tenant’s performance once the lease is signed.  That’s a critical aspect of a real estate professional’s compensation.  Once the transaction has been completed, so has the job of the real estate broker, and at that point his / her compensation has been earned and is due.  Real estate brokers are NOT in the tenant credit guarantee business and are not responsible for the performance of the tenant after the lease is executed.  Read more on this subject.

Explain to your tenants that at some point, while you are working to protect them, you may ask for them to demonstrate to the landlord that they expect you to be compensated adequately.

Step 2. Make It Clear in Your Representation Agreement

Never work to acquire real estate on a company’s behalf, without having a written agreement between them and your company.  Your agreement should define your obligations and those of your client.  It should specify how and by whom your company would be paid, and should state that your compensation is not dependent on your client’s performance under any lease. Moreover, in your agreement, your client should agree not to execute a lease until your company has secured an executed commission agreement from the landlord.

Step 3. Spell It Out in RFPs and Offers:

Include text in all requests-for-proposal and offers, specifying how much and by whom your company would be paid, that your compensation is due in-full upon execution of the lease, and that the tenant’s creditworthiness and/ or performance under the lease shall not impact how, how much, or when your compensation would be paid. The old standard text that often appears on offers saying “Commission to be paid by separate agreement” is no longer a viable means of protecting yourself.

Shouldn’t the landlord know in advance what your compensation expectations are, so he/she can properly budget for transaction costs?  Shouldn’t your tenant-client know how you’ll be paid?  Then, why not be transparent?

Include text in RFPs and offers clearly stating that you make no representations, claims, or warranties, as to the tenant’s creditworthiness, financial condition, or ability to perform any of its obligations, that the landlord will be solely responsible to conduct its own investigation of the tenant and satisfy itself as to the tenant’s financial condition, and that your compensation shall not be conditioned on the tenant’s creditworthiness, financial condition, or ability to perform any of its obligations.

Step 4. Be Clear in the Commission Agreement

Irrespective as to whether it is a common practice in any market for a landlord and tenant broker to enter into a commission agreement, always secure a written commission agreement before a lease is executed.

In almost an identical fashion, include text in the commission agreement, whereby the landlord acknowledges that you made no representations, claims, or warranties as to the tenant’s creditworthiness, financial condition, or ability to perform any of its obligations, that the landlord will be solely responsible to conduct its own investigation of the tenant, and that your compensation shall not be conditioned on the tenant’s creditworthiness, financial condition, or ability to perform any of its obligations.

By the way, since you’re asking the landlord to acknowledge that you made no claims, be certain not to make any!

Step 5. Use the Lease to Protect Your Compensation

The lease provides an excellent opportunity for you to be transparent with your tenant and bring the tenant in on the commission conversation.  Explain to your tenant that as you fight hard to secure favorable terms on its behalf, you will need the tenant’s help in securing favorable commission terms.  The tenant’s assistance becomes especially important since you will not ask the tenant to compensate you, but only to stand arm-in-arm with you as you negotiate both the lease terms necessary to protect the tenant and the commission terms needed to protect your company.

With tenant and broker in a unified front, this approach benefits both tenant and broker.  It clearly telegraphs to the landlord that both tenant and broker are aligned in all respects, are co-dependent, and that the landlord will not likely be able to divide and conquer, as some overly-aggressive landlords will seek to do.

Include text in the lease stating that if the landlord does not pay the broker its commission in-full and on-time, in accordance with the terms of the commission agreement, then the tenant may, at its option, pay the broker’s commission and deduct an equal amount from its rent without being in default.

Most tenants will have no issue with the addition of this type of text, as it places no burden on them, and the decision to pay you will be at their discretion.

Some landlords will yell and scream and claim their lenders will never approve of such text. Since such text places no greater burden on landlords than the terms contained in the commission agreement, and since it specifically references the terms of the commission agreement, lenders typically take no issue with such text.  If a landlord fights hard on this issue, be very careful and there may be real problems hiding around the next corner.

Step 6. Secure the Lender’s Cooperation

Landlords get lenders to grant non-disturbance agreements all the time, wherein lenders agree not to disturb tenants’ right to use and occupy their space in the event of a building’s bankruptcy or other similar circumstance.  Similarly, brokers should insist that landlords secure from their lenders written agreements stipulating that, in the event of a building’s bankruptcy or other action that might displace the landlord, the lender would fulfill the landlord’s commission obligations.

In tough times, unusual things can occur, and a business-as-usual approach can prove dangerous. This is especially true when it comes to broker compensation, which is sometimes treated as the last point to be negotiated or as a landlord’s slush fund, in some transactions.  Moreover, if during lease negotiations on your client’s behalf, a rogue landlord thinks he/she can get the best of you because you were not aggressive in securing your compensation requirements, that unfortunate perspective will likely translate into how the landlord will negotiate with you for your client’s lease. If you’re weak in protecting yourself, you’ll be perceived as being weak on your client’s behalf, and in fact, you may actually lose for your client, while you lose for yourself.

 

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.

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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.

###

Change is Good!

Ah, birthdays!  GlobeSt.com is 10 this year!  And, what changes GlobeSt.com has seen across so many facets of commercial real estate in those 10 years.

In that short time, many changes have taken place in the tenant representation and corporate advisory business that will likely have a permanent impact on how transactions are done…one way or another.

Creditworthiness

For as long as I can remember, it has been a common practice for commercial landlords to demand proof of financial worthiness from prospective tenants before finalizing any transaction.  Based on available information, landlords calculated risk and set rents, terms, and security deposit requirements, and decided if they chose to do business with tenants on the basis of the financial strength of those tenants. Landlords were clearly in the driver seat.  Oh, how times have changed!

Now, tenants demand and most often receive proof of landlords’ financial worth.  And, with such prominent fear by tenants that in the current economy, landlords could lose their buildings, in turn causing tenants’ rights to be diminished or lost, more and more tenants now assess landlords’ financial condition prior to engaging in lease transactions with them.

Will the Landlord Be Around in the Future?

It used to be assumed that, despite lengthy contracts, a certain element of professional relationship was always part of any lease transaction.  In many cases, tenants could rely on their landlords for certain elements of their occupancy experiences that were not written into any lease.  But, now the potential for buildings being foreclosed upon is highly increased, and in prior years when markets were hot, buildings were sold and then sold again, often in relatively short time periods.  Even today, in some markets, with prices as low as they’ve been, many buildings are trading hands.

Accordingly, tenants can no longer assume that the landlord with whom they negotiate their lease will be the same one with whom they might negotiate again if, at the expiration of that lease, they seek to renew it. Tenants must negotiate leases with the expectation that another landlord will be in-place, and that little likelihood of a relationship on which they can count, will exist.

Prices Are Low, But…

In the current market cycle, some tenants find themselves faced with an unusual combination of lower rents, but little available landlord funds, and the necessity for tenants to fund their own improvements and transaction costs. With companies seeking to preserve cash, this makes transactions challenging.

No Takers

At the present time, when companies have sought to reduce and contain costs by disposing of surplus assets and by paring down liabilities, commercial tenants see almost no market for sublease space.  In some markets, there exists no price at which such space can be subleased, because there simply exists no demand.

Lease Renegotiations

Lease renegotiation transactions have been around for a long time.  However, they came into vogue in the last three years and became the transaction of choice, as a means of generating opportunity for both landlord (usually by extended lease terms in years) and for tenants (most often including lower occupancy costs, surplus space relinquishment, and improved terms).  It may be true that in the U.S. more leases have been renegotiated and restructured in the last three years than new leases have been completed.  Many in the industry expect lease renegotiations to remain a standard transaction opportunity for both landlords and tenants, even after market conditions come back into balance.

Times, they have changed.  They’ve been both exciting and interesting. Here’s to even more exciting and changes times!

 

 

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. 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.

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