Creating a Strong Relationship with Brokers
Building a strong relationship with brokers is essential for anyone looking to succeed in the commercial real estate market. These professionals provide a wealth of information that is often not accessible through public records, including market trends, leasing data, and sales velocities. By initiating a conversation with the right approach, investors and analysts can gain invaluable insights that help in making informed decisions about property investments. This article will explore effective strategies to initiate and maintain a productive relationship with brokers, ensuring access to critical market information and potential investment opportunities.
Note from Spencer and Michael: This is another post from our guest contributors and industry professionals. James Nelson is an investment sales broker and Principal and head of Avison Young’s Tri-State Investment Sales group in New York City. He is also a passionate investor and has successfully launched two real estate funds with capitalizations over $350 million. He is passionate about helping others find success in the industry and has graciously offered to share his expertise with the A.CRE community. A huge thank you to James for offering his insights! Click here to learn more about James or contact him directly.
Part 1: An Initial Conversation with a Broker
Whether you’re looking to invest in property or to improve your assumptions as an analyst, you’ll find that brokers can provide valuable information. An investment sales broker could give you insight into what’s going on in the market, including sales velocity and information on comparable sales. Leasing brokers can be helpful too, as they can share what types of rents are being achieved, how long it could take to lease a space, and if any concessions might be needed. During these conversations, you could find out many of the advantages and disadvantages related to a property, especially if you handle the discussion in the right way.
All these details are useful to have if you’re underwriting the property or looking to invest on your own account. Since much of this information is proprietary, and you won’t be able to find it on public records, it’s important to have a relationship with brokers you can call on and trust. To do this, you’ll want to lay the right groundwork when starting out with a broker.
Follow these tactics during your initial interaction to build a relationship with brokers and find great deals:
1. Establish Rapport
Begin by expressing genuine interest in the broker’s expertise and the properties they handle. You might mention that you’ve noticed the broker is active in the area or that you’ve read about some of their recent transactions. You can also share a brief background about what you’ve been doing, so they can understand your position. Perhaps you’re new to investing in the market, or maybe you’re looking to purchase an additional property in the area.
2. Ask about the Asset
If you’re interested in an asset the broker is overseeing, you can ask them to share more information about it. Check why the owner is selling the building, and for how long it has been on the market. You could gauge how much interest the broker has been getting about the property too. You may want to ask about the condition of the property and any current leases.
3. Look for Opportunities
A great broker will view hundreds of properties every year and be able to pick up on ways to improve a building or add value to it. You could ask if the broker sees any upside in the property you’re considering. You might even check on what they would do to reposition the space. This will show the broker that you’re looking to them as the expert and see them as a credible source.
4. Check on Challenges
Toward the end of an initial conversation, you might ask the broker if there is anything else to be aware of for the property. Additionally, you could check if they have any information about problems associated with the property such as violations or tenant issues. The broker might list some challenges to look for, or they may not have any information on hand to readily share.
5. Exchange Information
If you have insight to share, you can create a two-way street in which you’re bringing value to the table in exchange for information from a broker. What you share could be helpful for the broker, as part of their job involves knowing what’s happening in the market. In turn, the broker may be willing to share more insight with you as well.
Carrying on an upbeat conversation in a casual tone can help you get started in the right way with a broker. Keep in mind that even though some brokers might not be quick to share negative information about a place, you can ask questions at a later point in time to learn what to expect if you purchase the property. Finally, regardless of the outcome, you’ll want to value your relationship with brokers, and avoid putting them in a tough position. Keep conversations fairly short and follow up as needed. Over time, you could build mutual respect and carry out deals together in the years to come.
About the Author: Highly acclaimed investment sales broker James Nelson is the Principal and Head of Avison Young’s Tri-State Investment Sales group in New York City. During his 25-year career, Nelson has sold properties and loans totaling over $5 billion. James is also a serial real estate investor and has launched two real estate funds with total capitalizations of over $350 million. He is passionate about helping others achieve real estate success and offers regular training through his podcast “The Insider’s Edge To Real Estate Investing.” He regularly lectures at Columbia, Fordham, NYU, Wharton, and his alma mater Colgate. You can connect with James through his Contact Page.
