Brokerage is not like it used to be: Now more relationship-oriented

Today's commercial real estate broker is not your father's broker. The industry and marketplace have changed dramatically over the past decade. First, there was the Information Age which ushered in new ways of compiling and storing data on properties and communicating with buyers and sellers. More recently, it was the Internet which introduced website marketing, email communications and webinars. On top of the technology-infused changes, market-driven changes have also required brokers to wear more hats, understand more facets of commercial real estate and become more astute at business development. Whether a buyer or a seller, owner or tenant, or real estate investor, it is important to assess the depth and breadth of your broker's skills in these multiple areas. From Technology to Market Analysis How tech-savvy is your broker? In addition to traditional meetings and phone communications, is the broker comfortable communicating by email, and/or capable of coordinating a "Go to Meeting," if necessary? Does the broker have the ability to provide Power Point presentations with graphs and charts demonstrating a property's features and financial aspects? Can the broker create detailed property analyses and comparative data comparing, for example, a property to other leased properties and/or comparing a lease to a purchase? Is the broker familiar with various sales and lease documents and relevant terms and conditions within these contracts? It is vital that a broker bring value to the table, not only understanding the customer's business and operation, but also the customer's legal obligation relating to their current real estate situation, whether the space occupied is owned or leased. Knowing the Market A broker should have a strong command of the market; sales prices and rental rates for various types of properties in various geographic areas, as well as key economic conditions such as many banks holding foreclosed properties, tightening of bank credit and increase in owner financing. Being abreast of these dynamics enables the broker to better represent clients and negotiate in their best interests. Today's brokers also must keep current regarding changes relating to local zoning, town codes and ordinances, environmental issues including LEED/green building incentives, and municipal incentives for property ownership, building development and/or rehabilitation in designated areas. For example, in New York State, there have been many changes to the benefits associated with properties in a designated Empire Zone. Brokers who are unaware of the more recent reductions in Empire Zone benefits and tougher eligibility requirements could find themselves steering the wrong client to a property for which they will not qualify nor benefit. This is particularly true for many small businesses and/or those still in their "start-up" period. For businesses who expect to renovate and/or upgrade a space they will be occupying, having a broker knowledgeable regarding construction costs, materials and "Best in Class" processes is a major advantage. Depending upon how extensive the planned renovation, the broker can provide advice as to whether or not the necessary investment makes sense within the context of current market conditions. It's a much more strategic and consultative role. In fact, the broker's ability to be strategic on behalf of his customers is perhaps one of the most important attributes today's brokers can bring to the table. Developing Strategies to Address Market Trends Imagine a broker who can help his customers leverage key market trends (e.g., increase in bank foreclosures, fewer investment sales, foreign investor interest, lease extensions, etc.) versus one whose primary contribution to the relationship is driving you around, pointing to "Available Space" signs. There is no comparison. The broker in high demand today is not transaction-oriented, but relationship-oriented. This broker knows that to best serve clients, it takes a lot more than a ride in the car. It takes having a complete understanding of all areas governing the commercial real process and involvement that doesn't end with the contract signing. Ralph Perna is executive managing director for Newmark Knight Frank, Melville, N.Y.