| Are the high fees of commercial real estate | | | | manufacturing company on an exclusive basis. |
| brokers really justified? | | | | With our client, we looked at an industrial building |
| It depends what you get for your money. | | | | that seemed to meet all our requirements, and it |
| Today's professional commercial real estate | | | | quickly zoomed to the top of our negotiating list. I |
| broker provides a whole host of services and | | | | remembered, however, that there was a |
| expertise that was unknown 20 years ago. Fees | | | | superfund site in the neighborhood. I made a quick |
| are not regulated, and you are free to test the | | | | call to the president of an environmental company |
| open market and hire the services that you need. | | | | that we have worked with for many years, and |
| But there is a reason that most Fortune 500 | | | | he ordered the appropriate due-diligence reports. |
| companies have outsourced their real estate | | | | Within a few days, I had my verbal reply, "Hands |
| needs to a third party commercial real estate | | | | off!" The cost of the reports was under $1,000 |
| firm. | | | | (which we absorbed) and we saved our client the |
| If Fortune 500 firms have difficulty developing | | | | legal expense of ordering contracts, and |
| in-house expertise with all their capital and | | | | conducting his own Phase I, and ultimately Phase |
| resources, how will you fare? They know that | | | | II, investigation. Not to mention the time savings |
| today's sophisticated commercial real estate | | | | involved! Your broker should be bringing this sort |
| market requires a level of expertise that is | | | | of knowledge and expertise to the table. |
| difficult to develop with an in-house real estate | | | | Finally, many people forget that most brokers |
| department. You are entitled to this level of | | | | work on a contingency basis, and that the fees |
| expertise today, and if you are not receiving it, | | | | are necessarily higher to compensate the broker |
| your real estate expense may not be justified. | | | | for absorbing the risk. If the transaction is not |
| Your broker should save you a multiple of the | | | | completed, you generally have no obligation to |
| "high fees" that he or she is paid. I represented a | | | | pay a broker, regardless of the work or expense |
| non-profit agency some years ago that was | | | | incurred on your behalf. (Our firm will accept |
| renting their headquarters in a Class A office | | | | compensation in any of three ways, depending on |
| building. I made the case, and demonstrated it | | | | our client's needs and desires: on a retainer, by |
| with spreadsheets, that they should purchase a | | | | the hour, or on a contingency basis. Over 95% of |
| building to achieve substantial savings in real estate | | | | our clients choose contingency.) |
| tax expense. They followed my advice, we | | | | Are the "high fees" of your real estate broker |
| purchased a 25,000 square foot office building, | | | | justified? Make sure they are! Hire the talent you |
| and they are now saving over $200,000 a year. | | | | need and insist on the most up-to-date |
| My fee was a small fraction of their savings. | | | | representation. Your savings will be a multiple of |
| In a different example, we recently represented a | | | | your broker's pay check. |