“You Owe Me!” said the Landlord’s Broker

Recently, in searching for a suitable property for one of our clients to lease, I spoke with a commercial real estate broker about a property he represents. I asked this landlord broker questions about the property’s size, amenities, and competitive benefits, the available space, rental pricing and offering terms, the owner, and more.  While the broker was a little less than forthcoming at the beginning of our conversation, he eventually opened up, not without some prying, and provided me with details to most of the questions I asked.

At the end of the conversation, based on the information gathered, I was able to determine whether the property would likely be of interest to my client, a company seeking to relocate its headquarters.  I thanked the landlord broker for his time and attempted to end the conversation, offering to speak with him again about my client’s needs after they’d authorized me to do so. Before I could end the call, the landlord broker shouted:

“Wait! You Owe Me!”

When I asked him what he meant, he replied by saying that because he had provided me with so much information about his landlord’s property, that in turn, I had an obligation to answer his questions about my client and its needs. Hmm!  I told him I would provide him with whatever information I could, but that I had no authority, and certainly no obligation, to do so, especially since my client instructed me to maintain strict confidentiality about them and their requirements.

The landlord broker didn’t like my response, and insisted that I was treating him unfairly.  He was serious.  This is not the first time I’ve experienced this kind of interaction.

Why do some landlord brokers think that because they provide tenant advisors with information on their properties…precisely what they were hired to do…that the tenant advisors are then obligated to disclose detailed information about their tenants’ needs?

Isn’t providing specific information the landlord broker’s job?  Isn’t that what the landlord hired him for?

What many landlord brokers fail to recognize is that tenant advisors are customers of the landlord broker.  And, like any good customer service minded professional, property brokers should treat tenant advisors with the respect that any customer deserves.

Landlord brokers are the front line salespeople for landlords. Their job is to inspire tenants and their brokers about their landlord’s property, to engage in negotiations, and to complete transactions on terms favorable to their landlords, so as to achieve their landlords’ intended ROI and other objectives.

The landlord broker’s job would certainly be easier if the tenant advisor disclosed a lot of information about its client, so the landlord broker could better determine how to satisfy the tenant’s needs. But, tenants are not always eager to disclose information for many reasons. Accordingly, they often direct their brokers not to divulge information about them.  And, that’s their right.  Despite this, some landlord brokers act as if providing property information to a tenant or its advisor is almost like doing them a favor.  I find that very odd, and a great way to turn off tenants and their advisors!

If I walked into a shoe store, asked questions about a pair of shoes, listened to the information, provided little feedback, politely said thank you, and turned to leave, would I be obligated or expected to provide a full download to the salesperson as to why I wasn’t interested?

Of course the salesperson would like to know why I chose not to make the purchase, and helping him would be the right thing to do, assuming that I was comfortable doing so. But, does that obligate me to provide such information?  Heck, no!

And, if I chose not to answer the salesperson’s questions, would it be advisable for the salesperson to demand that I answer him or berate me? Would I ever go to that store again? Would the salesperson’s boss appreciate my having been turned off to ever doing business there in the future?

From a customer service perspective, why should interactions over commercial real estate be any different?  Because greater dollar amounts are at stake? Wouldn’t that suggest a greater emphasis on customer service and relationship building with both tenant and broker, as a means of generating a basis for future opportunities?

Most landlord brokers are very professional.  Some still don’t get it.  Those that embrace a customer-service approach to promoting their landlords’ properties continually achieve the lease more space than their competitors, and highest levels of success, both for themselves and their landlords.

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
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Properties
What Our Clients Say

Copyright Real Estate Strategies Corporation 2011.  All Rights Reserved.

###

Why Should I Negotiate Against Myself?

You’re going to love this one!  This landlord deserves the Self-Centered Stupidity Award!

In a recent transaction, our firm represented a well-known global company seeking to relocate its U.S. headquarters into an amount of office space that got the attention of a lot of commercial landlords.

After reviewing the local market, our tenant selected a short-list of three properties.  After receiving proposals from all three properties, our tenant decided that one landlord offered terms that not only were not competitive, but which were truly out in left field.  We agreed. This, despite our having provided all three landlords with the same request-for-proposal containing identical information, and after we provided each of them with the same guidance.

So, our tenant eliminated the non-competitive property from future consideration, and proceeded to negotiate with landlords of the other two.  After a while, the landlord of the eliminated property contacted us, expressing his extreme disappointment in his property having been removed from our tenant’s consideration. The landlord insisted that our tenant was in error, and that our tenant should have submitted a counter-proposal.  He then worked very hard to convince us that he and his property could be competitive and satisfy our tenant’s needs, if given another chance. He asked, no…practically begged, for an opportunity to get back into the competition.

After some discussion, our tenant agreed to consider a new proposal from the landlord.  When told the good news, the landlord was furious that he would not receive a proposal from our tenant. He complained, saying “Why Should I Negotiate Against Myself?”  What a jerk!

Our tenant moved on and made a deal elsewhere.

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.

###

Using Non-Disturbance Agreements to Protect Broker Commissions

Commercial Real Estate Professional Calls for Change to Industry Practices

Non-disturbance agreements have been around for a long time. They have become a crucial component in protecting corporate tenants from being removed from their space by lenders who may foreclose on the buildings occupied by those tenants.

Should commercial real estate brokers be entitled to the same protections…that, if a lender were to foreclose, the broker’s rights to receive future commissions would also carry forward and become the obligation of the lender?

Currently, in most states, broker commission agreements are personal service contracts between landlord and broker, and don’t run with the land. Basically, if a lender were to foreclose on a building where a broker placed a tenant, the broker would likely have no standing. If the commission agreement provided the broker with the opportunity to receive commission payments for future events, such as if the tenant were to expand, extend its lease, purchase the building, or otherwise, in most cases, the lender would have no obligation to honor the commission agreement. And, the broker would likely receive no compensation under the commission agreement.

Since commercial real estate brokers are often one of the primary reasons a tenant and a landlord are brought together, shouldn’t brokers be entitled to the same protections often afforded tenants?  Like the tenant not being removed in the case of lender foreclosure, and like other protections afforded landlords, shouldn’t the broker’s rights also not be removed?

This approach has been applied from time to time, but only in extreme instances, and with a lot of effort. An industry wide standardized “broker non-disturbance agreement” is an idea whose time has come, especially at a time when so many commercial landlords are losing their buildings and while others are simply not capable of paying their bills, including commissions.  Like a non-disturbance agreement between a tenant and lender, a broker non-disturbance agreement would be a separate document between broker and lender.  In a broker non-disturbance agreement, the lender would agree, in the event it foreclosed on the landlord, to take-on the responsibilities to which the landlord agreed in the commission agreement.  In this manner, the broker’s future interests would be protected through the agreement with the lender.

Some landlords may misunderstand the true positive value associated with offering broker non-disturbance agreements.  Consider the office building that is rumored to have financial challenges. Some brokers might be less eager to aggressively pursue transactions there for fear of not being paid. By offering a broker non-disturbance agreement, financially challenges landlords may be able to attract more brokers to their buildings, and ultimately, increase leasing activity and close more deals.

Of course, other opportunities exist to protect brokers, including the inclusion in the lease document the right by the tenant to pay the broker its compensation, while deducting that cost from its rental obligations

Either way, commercial real estate brokers certainly provide valuable services to tenants and landlords. And, with the extreme challenges and very real risks that exist in today’s business climate, like others, brokers are entitled to reasonable protections and the expectation that they will receive the compensation to which they are rightfully entitled, especially those to which others have contractually committed to pay.

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.

###

Selling Corporate Real Estate to Speculative Investors – A Risky Game

When seeking to sell their companies’ commercial real estate, CFOs can find themselves in very risky positions when they enter into sale agreements with speculative investors. Some speculative investors don’t seek to simply purchase real estate. Instead, they use purchase agreements as leverage and opportunities to achieve other results.  This scenario may seem extreme, but it is a very common practice in how some investors acquire real estate.  Now, after such a long period of lingering economic stagnation, itchy investors eager to capture opportunity are beginning to tap into the desires of equally frustrated property owners, and are making speculative plays with their properties, often with those property owners unaware of the increased risk they bear. As chief guardian of their companies’ assets and financial interests, it is imperative that CFOs be aware of the very real risks to value erosion that can occur when dealing with speculative investors.

When selling real estate to speculative investors, landlords, or developers, it is imperative for CFOs to understand, before entering into any type of purchase agreement, option, or otherwise, the specific events that will occur between the execution of a purchase agreement and the intended closing date.  In a strong purchase agreement, the optimal transaction structure would include only a few clearly defined and achievable events intended to take place prior to closing. More importantly, the purchase agreement should contain very few contingencies that would permit the purchaser to terminate the agreement.  One of the keys to protecting the seller from the perils of doing business with a speculative investor is the payment by the purchaser at the execution of the purchase agreement of a substantial at-risk down payment. In many cases, it is unfortunate that the way many speculative investors seek to control properties often places sellers at great risk even after the purchase agreement is executed.

Very often speculative investors seek to “lock-up” a seller’s property, so that the speculative investor has beneficial control of the property for a period of months. During this time the seller usually cannot sell the property to anyone else, nor enter into a contract with another purchaser.  After speculative investors secure a purchase agreement, they often use due diligence periods to determine if their intended transaction will prove viable.  It is during this time when they should be actively pursuing municipal approvals, based on a logical and thought-out plan for the property.  Instead, during due diligence, many speculative investors often expend substantial effort to secure financial and other arrangements with development partners, investors, lenders, tenants, downstream buyers, or others.  They basically use the property and the purchase agreement as currency to uncover even greater opportunities for themselves beyond the mere purchase of the property, often extending due diligence periods when they need more time. In many cases, lock-up provisions in purchase agreements often restrict sellers from doing much anything with their properties other than maintain them and await the results achieved by the purchaser during due diligence.

When speculative investors are not successful in achieving the opportunities they seek, they often use contingencies contained in purchase agreements, or they deploy other means, including legal action, to avoid closing on the purchase. As a result, at this juncture, many speculative investors will move to terminate the purchase agreement, expect return of their down payments, and will walk away from the transaction. In such cases, speculative investors experience little, if any, financial or other loss.  By contrast, the impact on the seller can be devastating.

When a purchaser terminates a purchase agreement after many months, the seller is often left in a very challenging position, especially because the typical speculative investor will not provide the seller with a large at-risk down payment as part of the purchase agreement.  Moreover, when the above occurs, the seller will have lost valuable time, might have foregone other more favorable sale opportunities, might have missed a market peak, may be saddled with future challenges resulting from local municipal authorities who feel that their time was wasted by an unrealistic speculator and a seller who was not careful in its selection of an appropriate purchaser, and the property could take on a white elephant status in the eyes of other acquirers. This series of events then often draws bottom fisher buyers, who seek to acquire seemingly distressed properties and those owned by frustrated sellers at low prices.  This, in turn, further contributes to price erosion and creates additional challenges for the CFO seeking to dispose of the property in a reasonable time, with low cost and risk, and at a reasonable price.  In the extreme, even if the seller does not return the speculative investor’s down payment, almost any amount of security, even if forfeited, would not likely provide adequate compensation to the seller for the damages it could receive.

As in any well thought-out business endeavor, for the CFO seeking to sell his or her company’s commercial real estate, beginning with the end in mind is the prudent approach. In this type of transaction, the means of the speculative investor will dictate the end, and much more.

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
Properties
What Our Clients Say

Copyright Real Estate Strategies Corporation 2011.  All Rights Reserved.

###

The Dangers of Hand-Shake Brokerage

There was a time when a person’s word and his / her hand shake meant a lot.  They were both binding and had real meaning.  Today, with vast global cultural differences, various interpretations of words, lengthy and extremely detailed contracts, a highly litigious society, and some plain-old dishonest people, conducting business on a hand-shake is not only inappropriate, it’s downright dangerous!

Remember that two honest people, with the absolute best of intentions, can easily misunderstand each other and disagree.  If this is true, then why do some commercial real estate brokers still conduct business on a hand-shake?  Why do they work on behalf of companies to negotiate transactions without so much as a simple document describing the roles of client and service provider?  Are they overly trusting? Are they lazy? Is there an advantage to working in this manner?

In many states, a real estate broker working without a document indicating which party he / she represents may be in violation of license law.  Such action could subject the licensee to fines, temporary or permanent license suspension, or worse.  In other states, the role of a real estate broker, and therefore his ability to serve his customer as intended, may be predetermined by law, irrespective of documentation.

So, at a time in history when creating written records and documents is easier and quicker than ever before, why do some commercial real estate brokers still work on hand shakes?  Is this simple laziness?  I’ve heard some brokers say that instead of spending time on documenting their client relationships, they move directly into the deal. They say that paperwork doesn’t make them money, but closing deals quickly does.  Some positively characterize this approach as being focused on the client’s needs, not their own. Is that really true?  Since the best written agreements, in these instances, describe the roles, rights, and responsibilities of both real estate brokers and their clients, I don’t see how working without such a document could possibly be in the clients’ best interests. I don’t even believe it is the best approach for service providers, either!

Some brokers have told me that they work on a hand shake, because their clients prefer not to sign agreements.  I find this to be a weak argument.  Don’t companies sign other agreements, like leases, employment agreements, purchase and service contracts?  Most companies will gladly sign a representation agreement when the reasons and benefits of doing so, as well as, the risks of working on a hand shake, are properly presented to them.  In fact, most companies will shy away from executing an agreement when they’re uncertain of the ability of the service provider to perform, when they lack confidence in the service provider’s experience or expertise, or when they are not yet committed to a project.

Are real estate brokers aware of the true implications of not documenting their client relationships?  Do they know that when working on a hand shake, their relationships, and their corresponding obligations, may not be clear?  Do they disclose to their clients that without proper documentation, their relationships may be different than intended?  Do they explain the increased potential for conflict-of-interest? Do they communicate that, absent a written representation agreement, a real estate broker presenting buildings to a prospective tenant or buyer may have a binding legal fiduciary obligation to represent the property owners?  By not informing their clients of these facts, brokers can land themselves in trouble.

Given the apparent dangers, why would any commercial real estate broker or his client, work on a hand shake?  What are 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 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.

###

Do Your Clients Really Need to See EVERY Available Property?

It is amazing that today, some commercial real estate brokers still believe that they and their clients must physically visit every building that might possibly support their clients’ needs. This remains the case in many geographic markets that are over-supplied with millions of square feet of available properties. My gosh!  Brokers forcing their tenant clients in and out of 10, 15, 20, or more buildings over an entire day or two, just seems so counter-productive!  In fact, it is!  Your clients’ time is much too valuable to waste it trudging in and out of building after building.  And, frankly, your time is equally valuable. So, why waste so much time?

By showing your clients every available property, are you really providing them great service or are you simply protecting yourself?

With the availability of technology and information at your fingertips, there exists no need to show your clients every property.

For those brokers who have not been appointed the authorized or exclusive representative of the tenant seeking to acquire a building, well, yeah, you do have to visit every property.  Because in that capacity, you don’t represent the tenant and you’re not really providing them much service.  In most states, your binding fiduciary obligations would be to yourself and/or to the property owners whose buildings you present. So, you have to show every building in order to protect your own interests.

The optimal approach to delivering service to your clients is to be formally engaged, by written agreement, and authorized to represent their real estate interests.  As your clients’ authorized representative, you should have a process that permits you to gather information about them and their business needs, so you can gain an understanding of how they wish to acquire and use real estate.  Coupled with your knowledge of your local market, you should be able to marry your clients’ needs with those properties that can best accommodate them, and eliminate those properties that don’t apply.  If you’re uncertain about whether particular properties would work, you can always provide your clients with a written or electronic report, conduct a desktop review, and together with your client select those that are best suited.

If you’re concerned about covering your tail or losing a commission, for fear that some outside broker may bring an eliminated property to your clients’ attention and that your client may forget that you’ve already presented it, or because you’re concerned that some landlord may attempt to circumvent you, there is an easy solution. Simply provide your client with a list of those properties that you eliminated along with your reasons, and offer to inspect those properties with your client at a later date, if the client wishes to see them.

In this manner, your client’s time and resources will be respected and maximized, your tail will be well covered if you feel it must be, you will provide a better service to your clients, and will drive to conclude their transactions quicker, more effectively, and more profitably for everyone.

So, NO, your clients don’t really need to see every available property!

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.

###

Commercial Real Estate Brokers: Shhh! Don’t Tell Your Tenants How Much Commission You’ll Make!

An Open Letter to Commercial Real Estate Brokers

Hey, commercial real estate brokers?  Keep your compensation a secret, even from your own clients. They don’t know how much you make, they’re too dumb to figure it out, and if you don’t bring it up they won’t think about it.  NOW, REALLY!

In most commercial real estate leasing transactions, commercial brokers representing tenants receive their compensation in the form of commissions paid by landlords.  Yep, that sure sounds like a conflict-of-interest to me!  But, unfortunately, that’s the way the industry works.

Guess what?

• Your clients can figure out your compensation…and, they will!
• Why withhold information from you own client?
• When your role is to protect your client’s interests, withholding information that they can easily figure out on their own makes you look stupid and dishonest
• Are you obligated to disclose your compensation to your clients? While you may not have any legal obligation to do so, from a moral and ethical perspective, I’m pretty sure the answer is “Yes!”

Whether or not you should disclose your compensation to your clients also begs other questions:

• Why would you want to be transparent?
• Are you concerned that someone might view your situation as your being over compensated somehow?
• Did compensation discussions take place that may have negatively affected your client?
• Is something negative going on?
• Did you have to do any favors or compromise your position (or that of your client) to secure your compensation?
• Were those favors at the expense of your client?  Did you disclose them to your client?
• What might your client have lost in exchange for the compensation you secured?
• Have you compromised your client in any way?
• Do any conflicts-of-interest now exist or did they previously exist?

If all you’re doing is getting paid, fairly and adequately, why wouldn’t you disclose your compensation to your client…the one who is the very reason for which you’re able to generate compensation?

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.

###

Hire Us to Represent Your Property Because We Represent So Many Other Buildings!

“Hire us to represent your property, because we represent so many other buildings…and, we can tell about all of the leads at those buildings…to help you lease or sell your building quicker!”

In this day and age, when transparency and conflict avoidance are top of mind of almost every corporate executive, I am amazed that some commercial real estate brokers still use this tired and lame approach when soliciting property representation engagements.  What is truly amazing is, that given the above, some property owners still buy this line of trash!

Some brokers actually tell property owners that they should hire those brokers because the brokers represent a lot of other buildings and will share with them the leads that the receive on those other buildings.  That is a very common pitch!  Those brokers make claims like:

• You’ll have our complete attention (How is that possible?)
• Because we represent so many buildings in the local market, we see every tenant (Will you share my leads with other landlords?)
• We’ll tell you everything that’s going on in the market (Will your other clients mind?)
• Sign with us, and you’ll have a greater chance of making more deals (More or fewer deals?)

So, let me understand this:  Some property owners are actually comfortable not receiving true representation, the kind of aggressive and objective expertise designed to protect their interests, beat their competition, and help them succeed…the kind of service to which the broker representation agreements the sign actually entitle them?

Instead, they’re ok with their buildings being thrown into a large pool, so when a tenant jumps into that pool, if the property owners’ lucky number just happens to pop up, or if the broker overseeing that pool decides it’s that property owner’s turn, only then would they get a shot at that deal?  Is that really what they’re signing up for?

Do these property owners recognize that while they’re enjoying the supposed benefits of so many more leads that come from throwing their buildings into that very large pool, that some buildings or property owners will drown?  Do they think that brokers offering this service will favor them, and that all of the other property owners who were promised the same access to “all of the leads” won’t be clamoring for the same tenants?

Have these property owners considered that while they’re feeding on all of those supposed leads generated for them by all of those other buildings, that leads for tenants or buyers who may be sincerely interested in their buildings, will also be thrown into that pool, thereby possibly diminishing their likelihood of success?  Do they see that those tenants and buyers may be pulled from that pool and rescued by some other property owner at another building?

Is this true representation?  Isn’t this approach a blatant conflict of interest?  Do many property owners actually accept this approach?  Do the best brokers offer something better?

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.

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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.

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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.

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