Stan Mullin specializes in the sales and leasing of industrial land and buildings in southern Orange County, California. His areas of expertise include: entitlement, contract language, construction schedules, development, assessment district and community facility district bond financing.  

Characteristics To Expect In Your Real Estate Consultant

Author: Stan Mullin, CCIM, SIOR

On of the largest economic investments individuals and corporations make is in the acquisition or leasing of commercial real estate. To help us identify and distinguish between the alternatives, eventually leading to a commitment on the property, individuals and industry can benefit from skilled assistance. Knowing what to expect from your consultant, advisor or broker is the topic of this article.

The traits desired in a real estate consultant differ based your level and area(s) of sophistication. An experienced land owner may only want a “rainmaker” to identify prospective properties or tenants. A busy client may wish to “outsource” many of the responsibilities that he or she typically addresses due to time limitations. But the vast majority of consumers have a small to moderate level of experience in commercial real estate and would benefit from an advisor that was equipped with a broad range of skills.

Below are some of the characteristics that most clients should expect in their real estate broker/consultant:

Market Knowledge

The keystone to most real estate assignments is for the agent to have an in-depth knowledge of the market area of the project. Your real estate advisor should have access to detailed information about properties that are currently available and the existing and previous owners and tenants of the properties under consideration. Knowledge of the benefits and liabilities of each community in your project sphere of influence (i.e. schools, amenities, trends in crime, etc.) will augment the real estate information to lead you to an informed decision. Wouldn’t you want to know if a freeway was planned nearby, it’s timing, access points, capacity, etc.? Streets widening, redevelopment of a portion of the city, new retail or tourist development and future events that directly influence the current and future value of the property you are evaluating are important to know before you make a commitment to real estate.

Integrity 

As with anyone that you employ, from your doctor to your accountant and attorney, you should have the confidence that your real estate consultant is honest. All of the other characteristics you should have in your service provider can be in place, but if you do not have the confidence that the agent is telling you the facts of the circumstance truthfully, you will not have the assurance that the decisions that you make are sound. 

As a buyer or tenant, the client must be confident that his or her broker has provided information on all of the opportunities that fit the parameters outlined. As a seller or landlord, if the agent has indicated that he has taken certain steps to expose the property to the likely prospects, the client should know that those steps were taken. In the selection of your agent, if they indicate their capacity to perform a certain task, test their veracity before your selection. A real estate consultant that has a good reputation in his or her business community will also receive greater cooperation from other agents and vendors and likely have access to more information, useful to your assignment.

Often circumstances arise when it is in the agent’s best economic interest if the client pays a higher price or the term of the lease is long. Ultimately, when the advisor gives counsel, the customer should be able to rely on that information as advise that is in the customer’s best interest and not the agent’s. 


Contact

Once you have made the selection of real estate agent, it is not uncommon that the agent and client reduce the frequency of their communication. The client may think that the agent “has the project under control” and the broker may be focusing on securing new business instead of focusing on the new assignment. References will help in developing a greater degree of confidence that once your choice is made, your broker will keep you current on the steps being taken to complete the assignment and the results of those actions. 

One of the primary goals of the real estate consultant is to avoid any unforeseen issues and if they do occur, mitigate them. One of the simplest ways of avoiding problems during a property search or disposition is through the maintenance of a consistent and thorough line of communication. Dialogue allows the agent to be reminded of the client’s objectives and provides an opportunity for the agent to bring areas of importance to the client’s attention.

Communication Skills

Can your real estate consultant clearly communicate your requirements to the market? Can he sell the benefits of the surrounding community, your property, credit, ability to close or use? If he is convincing in his meeting(s) and interview(s) with you and your partners, then he or she is likely to be able to communicate your project to others when the assignment begins.

Much of what is communicated is in style. You have likely heard the adage that 17% of what we communicate is what we say and 83% is how we say it. In many respects, that is true. Your consultant should be convincing in his argument with the other side that either your property offers the best environment for the prospective buyer or tenant or that you, on the other side, offer the best security of income or likelihood to close the transaction. Remember, this person represents you to the business community. What he or she says and does reflects on the perception of your business and will greatly influence the chance that you will realize a transaction that is in your best interest.

Command of the Contract

Lawyers play a vital role in reviewing and modifying contracts to insure that you will have an agreement that meets your objectives. But prior to involvement with counsel, your broker should have a good grasp of real estate law and an understanding of the documents that are used in the lease or purchase.

Agents should provide you with suggestions pertaining to provisions that benefit you, in addition to the basic provisions of price, lease or escrow term, deposit or rental adjustments. Issues such as rights to expand, contract, purchase, cancel, self help, the ability to sublease, audit expenses, dual agency and tenant improvement work, etc. are only a few of the issues that you may wish to have addressed in your proposals, as they relate to your project.

Early in the negotiation process, the parties should be in agreement as to the document that would be used to memorialize the transaction upon agreement of terms and language. Your real estate consultant should have read the document and be able to highlight, during the negotiation of the business terms, the provisions that can have the greatest impact on your ability to complete the transaction or operate at the property. It is not uncommon for real estate brokers to complete an assignment without ever reading the lease or purchase agreement. If your real estate consultant has read the contract, he or she often can provide valuable insight to your and the lawyer that ultimately approves the text of the contract.

Stan Mullin, SIOR, is a Senior Vice President in the Newport Beach office of Grubb & Ellis and specializes in corporate real estate matters. You can learn more about his firm by looking up www.grubb-ellis.com and he can be reached at stan@mcareceiverships.com.