How To Save Big: Why You Should Hire a Commercial Real Estate Consultant
Renting or buying commercial real estate can be an overwhelming process that’s seemingly still stuck in the previous century. Without the proper team, guidance, and support, you’re flying blind. While it’s not the right choice for everyone, hiring a professional commercial real estate consultant might be the right choice for you before spending 6, 7, 8 or even 9 figures on real estate.
What is a Commercial Real Estate Consultant?
The CRE Consultant is the person who represents you as the buyer, seller, owner or tenant for the purpose of transacting or developing commercial property. They understand every detail of the entire process, whether it’s site selection, market studies, incentive negotiation, transaction execution, or construction management, a knowledgeable consultant can guide you through all of it. The goal is for you to save money, never miss a deadline, or ever be left wondering what the next step is. Here at Realty Capital Analytics, we’re experts at greasing the wheels of the entire transaction, so everything happens seamlessly, without hiccup, maximizing your investment.
Why Do You Need a Commercial Real Estate Consultant?
Many people are afraid to pay commissions to a consultant or broker. But, almost in all cases, the commission fee is vastly offset by the savings and value-add services provided. Being able to leverage their experience, knowledge, access to information, and relationships will ultimately save you money in the long run. Here’s a breakdown of the top reasons why you should hire a commercial real estate consultant.
Knowledge of the Market
A good consultant has insider knowledge of the market. That’s a very general statement, so, what does that mean exactly?
Insider knowledge refers to all the details about what deals are being done, the prices they’re at, and the considerations around them. In the commercial real estate world, most of this information is not publicly available and a good consultant has their ear to the ground and finger on the pulse of the commercial real estate market in your area.
Access to Other Listings
In residential real estate, the MLS compiles listings, and all buyers and sellers can have access to it. In commercial, you almost always have to be working with an industry professional to find a listing (unless you see an ad for the rare listing found online).
A good commercial real estate consultant gives you access to an entire array of proprietary databases and commercial listings., and additionally, they likely have access to a number of pocket listings.
Access to Network
As with any industry, those who work in the commercial real estate space all tend to know each other. Because they have professional relationships with a lot of people in the space, by working with a consultant you also gain access to many of those relationships. This can save you a significant amount of time and headache when trying to get your ducks in a row to close or manage your properties.
You Will Be Taken More Seriously
Regardless if it’s right or wrong, a person or company representing themselves simply will not be taken as seriously as those with professional assistance. When a building owner, or seller, realizes you’re not represented, they know they can push more aggressive terms and take advantage of you.
By retaining a professional consultant, you’ll be expressing your seriousness and also gain credibility. This will do wonders for getting your offers accepted and securing more aggressive deal terms.
Understanding Your Needs
A good consultant will ask you several probing questions to get at the heart of what you need vs what you think you want. With this, you’ll be able to get more favorable terms on any deal you may work on. Most agents or attorneys simply don’t do this.
Good Communication
Real estate is a field that is largely based around relationships. As such, a consultant should be an expert at communicating to build and maintain relationships with clients and potential clients. To do that, consultants should have a good EQ to go along with their above-average IQ. That way they’re not just facts and figures-oriented, but understand how that applies to people, how to build and maintain relationships, and ultimately know how to close a deal.
Good Prospect Database
In residential real estate, listings are on the MLS, and most agents, brokers, or consultants use the MLS to find deals for buyers or to list properties for sellers. Commercial real estate is completely different because most listings are not found in any centralized database.
Instead, sellers and buyers are maintained on databases and contacted directly as opportunities come up. Because of that, a good consultant will have an extensive list of contacts and database subscriptions to assist you in finding the best deal.
Experienced in Commercial Real Estate
A good commercial real estate consultant has a lot of experience in the real estate industry and often has a past-life as a real estate investor, a director of real estate, or as a business owner themselves.
Regardless if you’re trying to buy, sell, or lease a property, a good consultant can draw upon years of experience from multiple sides of the industry.
Data-Oriented But Concise
Commercial real estate is a data-oriented industry, but not everyone loves looking at several different spreadsheets on multiple computer monitors. While that works great for some clients, most people want to know how the data applies to them, and not just have sheets full of numbers and equations.
That’s where a good commercial real estate consultant comes into play. The CRE consultant knows how to talk data and spreadsheets but more importantly, he or she will understand how this information applies to you and your business.
Obviously this ties back to having good communication skills, but it’s definitely a step above and beyond communication skills as consultants are expected to know the ins and outs of the market, and be able to communicate it in an effective way.
Who Should I Hire?
In short, that’s really up to you, your situation, and your personality. Even the best consultant on the planet may not be a good fit for some people, but it’s important to consider a few major factors when deciding who to hire and why.
What Type of Real Estate am I Buying/Selling?
Many people don’t realize that most consultants have a specialty in one or two types of real estate and you want to make sure the person you work with specializes in the type of real estate you’re trying to purchase or sell. Many offices have consultants with a variety of specialties, such as Realty Capital Analytics, but many offices only specialize in a few types of real estate.
It’s important to choose a consultant that has experience and is specialized in the kind of real estate you’re focused on.
How Much Guidance and Help Do I Need?
It’s important to take a self-assessment and truly know how much help and guidance you need. There’s no shame in needing guidance, but it’s important that your consultant knows where you stand and what you need before you agree to work together.
What’s My Timeframe?
This ties in with the prior point – if you’re ready to move now vs in two years from now, you may choose to build relationships with different consultants. It’s important to be up-front as you interview various commercial real estate experts and make sure your timeframe fits in with their business goals and working capacity.
Does My Consultant Have a Prospect List That Fits My Goals?
A good consultant will have a list of potential buyers, sellers, and property owners to prospect opportunities from. But does that list of buyers/sellers line up with your real estate niche?
Two consultants may both have 5,000 potential buyers, but how many of those buyers are looking for office space in the pacific-northwest vs multifamily in the south-central US?
While the consultant may not want to advertise their list details, you can find evidence of this by their experience selling, buying, or leasing property of your type, in your area, or working with past clients in a similar real estate asset class and region.
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At Realty Capital Analytics, our expertise spans across real estate financial modeling, fund modeling, asset management strategies, creative deal structuring, syndication consulting, and pitch book preparation. Our seasoned team is dedicated to offering tailored solutions that enhance value and optimize outcomes for our clients. We invite you to leverage our comprehensive services for your real estate investment needs. Contact us for a complimentary consultation, and let's discuss how we can support your objectives with precision and professional insight.