We Just Aren’t that Close!

Commercial real estate is not a terribly warm and fuzzy industry. The general image one gets is that of men in suits, skyscrapers, transactions…basically making deals. In some respects that can be the sad truth. It is inherently transactional in nature.

In most cases if a business is buying, leasing, or selling they are completing a transaction that will likely put them in a position to not need the same services for at least another 5 years or so. And the clients that are investors that are buying or selling on a regular basis are all about being transactional; their intent is to find the properties that make sense based on a set of numbers and negotiate the desired result as efficiently as possible. None of this sounds very intimate…right?

If you are expecting to buy or lease commercial real estate without having to feel just a bit violated, you may not have a realistic expectation. If you think you can maintain a private, guarded position, keeping all your financial secrets and end up with the best outcome…again it just is not a realistic expectation.

You need to understand WHY it is important.

Let’s pretend you are looking for a space to lease for your business. I will first describe how that process goes with most Commercial Real Estate Brokers. It starts like this:

You have probably been on the internet looking at spaces for lease on a public platform such as Loopnet. You begin to feel like you have a better understanding of the market and decide you would like to see one of these spaces in person.

You call the listing broker noted on the listing. They eventually call you back only to tell you “I’m sorry that space has been leased but how many square feet are you looking for and I’ll do a search and send you some other options.”

“Well great,” you say, “I’m looking for 2500 square feet of retail space in Tempe.” A day or two later you get this nifty report emailed to you; it has like 20 possible properties…this is GREAT! You go through them carefully and determine (from the information provided) that there are 3 or 4 that look perfect! You are so excited!

You call the Broker back and ask to see those 4 properties. They return your call and let you know unfortunately when they called on those four properties only one of them is still available and they offer to show you that one.

You meet the Broker at the property, and you are so disappointed to when you pull up to find that the property does not really meet your needs at all. There is another business in the same Center that would be a competing business to yours, the space is at the end of the Center and does not have any parking in front of the suite, and it is facing the wrong direction and would have hot sun blazing in at the peak time of your business hours. What a let down!

You tell the Broker that it just will not work. The Broker tells you they will keep looking. You go through this process a couple more times before you eventually find a space that might work for you.

Finally, you have found a space that is going to work…let’s get the appropriate paperwork signed and we’ll be off to the races! The Broker sends an offer on the space, after a day or two they let you know that the Landlord would like some additional information. They need your business plan, your tax returns, oh and by the way they will need both you and your spouse (who is not even part of the business) to provide their personal info for the Guaranty of the lease.

What?!? You do not have this information prepared, and you have not even thought about having this discussion with your spouse. After you spend the next couple of weeks pulling these items together you submit them to find out the space was leased to another party.

You get the picture we are painting for you.

It is a story we at Commercial Property Connect hear day after day. By the time this person went through the trial and error—the start and stop and restart—they had wasted so much valuable time! They probably did not enjoy the process of this exciting event at all. It is the essence of why we do it completely differently at Commercial Property Connect.

Our proprietary process, called “The Intentional Search,” educates the client in our very first meeting together about the up close and personal information that will be required to make you the most attractive tenant for the Landlord to choose. It is never a welcomed conversation to ask someone you are meeting for the first-time personal questions about their personal financial situation. The only thing that is even worse is asking them a month later when they are unprepared and depending on it to secure a space they love.

At Commercial Property Connect we want to educate and prepare our client for the entire commercial real estate process so that there are no surprises. We have certainly had prospective clients learn in this initial meeting what will be required and make the decision they are not ready to take this step…that is okay. Our job is to equip our client to make the best decisions for them.

It is important to invite a tenant to put themselves into the shoes of an owner/landlord. If you owned a property and are depending on a business to pay you rent, wouldn’t you want to know that they are making money that is adequate to cover all their expenses in addition to their rent. If this were a start-up business, you would immediately wonder if this newcomer has the cash to get them through that start-up phase that is so hard. You would want to know that they have done the planning necessary in advance so that THEY KNOW if they have the resources to weather the storm.

If they have not done a detailed business plan with financial projections, they really do not know what to expect, and this could mean they end up closing prematurely as so many start-ups do, and this means the landlord loses. What ever the situation is with your business; well established or up and coming; they must be prepared to present the story to the landlord in a way that makes it an easy decision for them to feel comfortable leasing to you.

At Commercial Property Connect we will invest the time on the front end to make sure WE are prepared to present you with best options to choose from; and we will also make sure YOU are prepared to secure that perfect property when we find it for you.