Great Expectations

Ryan Walsh

Principal

RadatzWalsh, Inc Commercial Real Estate

ryan@radatzwalsh.com

www.radatzwalsh.com

Topic: Commercial Real Estate

Things appear to be picking up and there is some optimism in the Commercial real estate market, yet deals remain as difficult as ever to complete. Just ask your fellow brokers and it sounds like a broken record:  "There is decent activity, but transactions are taking longer if they're getting completed at all." Now you will find some exceptions to this, but why have things gotten more challenging aside from just giving the easy answer of the economy? 

Client Expectations, for one, have a large role in how negotiations will play out. It has become increasingly important that a broker educates their clients about what to expect when entering the market to lease space or buy a building. Decision-makers see all of the For Lease signs, empty space, and have been fed a steady diet of reports that vacancy rates will not be improving anytime soon. They are looking for a good deal and they will take this opportunity to find one. 

A knowledgeable broker who takes the time to ask the appropriate questions up front will be able to save themselves and their clients a lot of time. Understanding your clients' needs and educating them on the market can be done simultaneously. There are great chances to lock into lease terms that we might not have previously seen and building owners are more prepared for offers that may have once been perceived as offensive. However, to be productive in negotiations it is essential that brokers have managed their clients' expectations.

You hear the words "aggressive" and "motivated" thrown all over the place when referring to how building owners will respond in their proposals to get a deal done. I focus most of my time on the Tenant/Buyer representation side and of course I want to make sure our clients are getting the most favorable terms possible. Until actually entering into negotiations, there is no true way to know how the other party will react. However, a well educated client should have a good idea what constitutes fair market value and rates.

 Prospects and buyers for their part can expect to get the best results if they start looking with a clear understanding of their requirements, budget, as well as ample time. There are more potential opportunities than maybe ever before. Companies with a good broker on their side will know what to expect and how to take advantage of all these aggressive deals!