Nothing Impacts Value More Than Leasing
Nothing Impacts Value More Than Leasing
Selecting the right brokerage team is critical!
• 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?
• 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
• 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
Advantages Disadvantages
If the asset manager manages multiple property types, a generalist firm offers a single point of contact .
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.
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.
Specialists
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 .
• 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”)
• 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
• It’s all about information!
– Starts as data
– Requires interpretation
• Market research
– In-house or 3 rd party
– National market data (MLS) companies
• Purpose
– Demonstrate economic/market knowledge
– Identify competitive properties
• 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-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
How are you going to lease the property?
How are you going to add value?
• 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
• Advertisements
• Broker mailings & e-blasts
• Creative/guerilla marketing
• Property website
• Presentation boards
• Sample space plans
• “Tablet-friendly” apps
• Video testimonials
• Look for creativity
– Firm can show off capabilities
– Samples from other properties
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
• 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?
• Communication
– Methods
– Frequency
• Reporting
– Leasing Status Report
• Can tenant complete monetary & nonmonetary obligations of lease?
– Publicly traded company
– Privately held company
• Credit check
– Dun & Bradstreet (D-U-N-S ® Number)
– Tenant financial records, credit references, etc.
• 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.
• Detailed assessment
– Brokerage team
– Marketing materials
• Customized for the asset?
– “Gut check”
The Listing Agreement