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!

The Selection Process - RFP• 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?

Who Gets an RFP?• 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

Activity in the Market• 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

Generalists v. SpecialistsGeneralists

Advantages Disadvantages   

If the asset manager manages multiple property types, a generalist firm offers a single point of 

contact.

As the saying goes, "A Jack of all trades is a master of none."  By focusing on multiple 

property types, the brokerage firm may not be as sophisticated in a particular property type 

as a specialist firm.

In the event the generalist firm has specialized groups within the firm, the asset manager can 

receive the benefit of working for a generalist firm, while at the same time receiving the benefits of 

working for a specialist firm.  It is the "best of both worlds."

By consolidating all of the asset managers business in one marketplace with one broker, the asset manager is a "bigger fish."  As a result, he will 

receive better service.

Generalists v. SpecialistsSpecialists

Advantages Disadvantages   

The specialist firm is an expert in dealing with that particular property type. It is all they do. They "live and breathe" that particular property type.

If the asset manager manages multiple property types, he will potentially have different brokerage firms working in the same market.

Leasing Success

Word of Mouth & Referrals

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”)

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

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

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

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

Laying Out a Leasing Strategy

How are you going to lease the property?

How are you going to add value?

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

Marketing Plan Components• Advertisements

• Broker mailings & e-blasts

• Creative/guerilla marketing• Property website

• Presentation boards• Sample space plans• “Tablet-friendly” apps• Video testimonials

Advertising & Marketing• Look for creativity

– Firm can show off capabilities

– Samples from other properties

Guerilla Marketing

Mama always said:You will never get a second

chance to make a first impression

Leasing and Marketing Materials• Marketing materials

– Brochures and handouts

– E-blasts

– Postcards

– Creative marketing programs

– Websites

– Advertisements

– Smart phone/tablet apps

– QR codes

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?

Asset Manager Relations

• Communication

– Methods

– Frequency

• Reporting

– Leasing Status Report

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.

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

In 2006, would you have signed a lease?

Would you have made the right call?

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.

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.

Interviewing the Brokers• Detailed assessment

– Brokerage team

– Marketing materials• Customized for the asset?

– “Gut check”

The Listing Agreement