Multiple Real Estate Brokers: Help or Hindrance?
Some business owners assume that contacting multiple commercial real estate agencies is better than seeking the services of one broker, thinking that this increases the number of properties they visit. While this makes sense in some ways, it is often not the case, especially in Manhattan. In New York City, all commercial real estate brokers source their listings from one property database, so brokers will often show the same spaces to the same prospective tenant.
Commercial vs. Residential Real Estate Listing Processes
Landlords, leasing agents, and property managers all source their listings from an online database exclusively accessible to professionals in the commercial real estate community. This listing service displays at least 99% of New York City commercial listings. Since commercial real estate firms usually do not have proprietary listings, all listing information is generally from a single source. In this respect, the commercial real estate market differs from the residential real estate market, where each brokerage firm has their own listings.
Why Working with Multiple Brokers Complicates Property Searches
Working with multiple brokers can prove to be a hassle and a big waste of resources, primarily because different brokers will show the same tenant the same space more than once. Once the tenant places an offer, the owner could ignore it knowing that multiple brokers toured the same space out of concern that this could lead to lawsuits and commission disputes. With one of the lowest consistent vacancy rates in the country, the repetition scenario occurs frequently in New York City because there are very few properties available that meet the tenant's specific space requirements.
Saving Time and Money with One Broker
To prevent the overlap described above, it is far more productive for a prospective commercial tenant to be represented by one licensed broker. This frees them from additional time constraints that come with working with multiple brokers, as tenants should make themselves available for property tours so that both sides get a better understanding of the space requirements.
Following the initial tour, the broker will continue to refine his search in order to locate properties that better meet the prospective tenant's criteria. At the same time, the broker will monitor the real estate market daily to locate new listings before future property tours. Upon selection, the licensed leasing agent will assist the client in drafting a proposal offer to submit to the landlord or managing agent.
Developing a Productive Working Relationship with Your Broker
Achieving a good working relationship with one broker can save valuable time for business owners looking for commercial real estate. The partnership helps streamline the search process and increases the likelihood that landlords will take their offers seriously. The less people in the mix, the more attention the landlord will give to the tenant.
Larger businesses and organizations in New York City often engage the services of a real estate brokerage firm that specializes in tenant representation. The firm then represents the client from property search to negotiation process to either lease or purchase commercial real estate. Formalizing this process involves the tenant and brokerage firm signing an exclusive agency agreement. The duration of the agreement is usually between six months to a year. It stipulates that the firm is bound to use its best efforts to locate a suitable space and negotiate the most favorable lease terms. In return, the client agrees to work solely with the firm for the duration of the agreement.
For a more in depth explanation of exclusive agency agreements and property searches, contact Alan Rosinsky at (212) 447-5403, prinicipal of Metro Manhattan Office Space, Inc.
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