Here are some commonly made mistakes to avoid when looking for your next commercial real estate space.
Unbiased Expert
A commercial real estate transaction can be one of the largest financial decisions a company can make. For example, if a company was buying a jet valued at $5 million you can bet they would learn all there is to know about it. Yet a real estate transaction can easily be just as significant an investment ($20 per sqft x 25,000 sqft = $500,000/yr x 10 years = $5 million).
You need to have a specialist on your side to explore all the options, analyze and compare them and finally make recommendations based off of the findings.
This expert should meet the following criteria:
- Loyalty to you
- Exclusively Certified expertise
- Proven track record
Lack of Market Research
It cannot be stressed enough that there is a direct correlation between the price paid versus the number of opportunities explored by the tenant or purchaser.
Simply put, the more bidders there are for your tenancy, the lower the price.
Market Intelligence = Money Saved
Not Asking the Right Questions
Not asking the right questions can lead to costly mistakes. Imagine your tenant broker forgot to ask about floor loading restrictions—you have 50 legal file cabinets that you need to put on that floor. The result could mean an extra $100,000 out of your pocket after the tenant lease is finalized to reinforce a floor you didn’t realize was ill-equipped, all because your Tenant Rep never knew to ask.
Knowledge is power in this situation and you should be confident you’re broker knows what to ask. They should use a comprehensive nine-page Request for Proposal (RFP) to ensure the specific needs of their client are met.
