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Choosing a Brokerage Team

Choosing a Brokerage Team. Nothing Impacts Value More Than Leasing. Nothing Impacts Value More Than Leasing. Selecting the right brokerage team is critical!. RFP process is unconventional/“different” Selection is intangible Evaluate prior performance Interview brokerage team Good fit?

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Choosing a Brokerage Team

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  1. Choosing a Brokerage Team

  2. Nothing Impacts Value More Than Leasing

  3. Nothing Impacts Value More Than Leasing Selecting the right brokerage team is critical!

  4. RFP process is unconventional/“different” Selection is intangible Evaluate prior performance Interview brokerage team Good fit? Can they get the job done? Can you work well with them? The Selection Process - RFP

  5. Selection Criteria Activity in the local market Experience with product type Leasing success Recommendations Firms that have been successful for the asset manager in other markets Who Gets an RFP?

  6. Advantages Name recognition More agents Cover market well Tenant reps see them as “the” brokerage firm covering market Firms that have been successful for the asset manager in other markets Activity in the Market

  7. Generalists v. Specialists

  8. Generalists v. Specialists

  9. Leasing Success

  10. Word of Mouth & Referrals

  11. Request for Information (RFI) • Gather information about brokerage firms • Strengths and weaknesses • Narrow the number of bidders • Create list of vendors to receive RFP (a/k/a “short list”)

  12. RFP Components • Market study • Overview of market/submarket • Firm’s qualifications • Evaluate strengths and weaknesses • People • Who will be assigned to the account? • Leasing strategy • Unique to the property

  13. Market Information • It’s all about information! • Starts as data • Requires interpretation • Market research • In-house or 3rd party • National market data (MLS) companies • Purpose • Demonstrate economic/market knowledge • Identify competitive properties

  14. Firm’s Qualifications • Not all firms are created equal • Not “one size fits all” • History of firm • Market coverage • Characteristics of firm • Generalist v. specialist • Potential conflicts of interest • Research prowess

  15. People • People-based business • Relationships are crucial • How to choose? • Would you like working with them? • Support team and roles • Evaluate conflicts • Transaction history • What % is landlord brokerage? • Role of senior managers/agents

  16. Laying Out a Leasing Strategy How are you going to lease the property? How are you going to add value?

  17. Laying Out a Leasing Strategy • Does the leasing team • Understand asset’s nuances? • Look with a “fresh set of eyes?” • Have a leasing plan? • Have the ability to take over quickly? • Proposed lease up timeline

  18. Marketing Plan Components • Advertisements • Broker mailings & e-blasts • Creative/guerilla marketing • Property website • Presentation boards • Sample space plans • “Tablet-friendly” apps • Video testimonials

  19. Advertising & Marketing • Look for creativity • Firm can show off capabilities • Samples from other properties

  20. Guerilla Marketing

  21. Mama always said: You will never get a second chance to make a first impression

  22. Leasing and Marketing Materials • Marketing materials • Brochures and handouts • E-blasts • Postcards • Creative marketing programs • Websites • Advertisements • Smart phone/tablet apps • QR codes

  23. Broker Compensation • Payment options • % Fee (flat v. sliding fee) • $ Fee • Paid to landlord broker • Split between landlord/tenant brokers • New lease v. renewal fees • Incentives • How to handle gross v. net leases?

  24. Asset Manager Relations • Communication • Methods • Frequency • Reporting • Leasing Status Report

  25. Tenant Creditworthiness • Can tenant complete monetary & non-monetary obligations of lease? • Publicly traded company • Privately held company • Credit check • Dun & Bradstreet (D-U-N-S® Number) • Tenant financial records, credit references, etc.

  26. Tenants with Credit Issues • Reduce landlord’s risk • Take space “as is” • Personal guarantee • Larger security deposit or letter of credit • Balancing act • Protect the landlord from risk • Take a risk v. miss an opportunity

  27. In 2006, would you have signed a lease?

  28. Would you have made the right call?

  29. Would you have signed a lease in 1997? Your tenant prospect is a 23-year old University of Maryland graduate who has been selling a new kind of t-shirt from the trunk of his car. His “corporate office” is his parents’ garage, and his gross sales in 1996 were $17,000.

  30. Would you have made the right call? The fledgling business person was Kevin Plank. The company became Under Armour, and it’s a multi-billion dollar business today.

  31. Interviewing the Brokers • Detailed assessment • Brokerage team • Marketing materials • Customized for the asset? • “Gut check”

  32. The Listing Agreement

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