Written by Joseph J. Lewis, SIOR, Vice President, Real Estate Broker

 

A Commercial Real Estate Broker offers two important things – occupancy and delivery of services. Hiring a Commercial Real Estate Broker to be your tenant representative is more beneficial than you may initially think. If you think you can do it alone, consider the following before tackling the project yourself.

 

1. It won’t cost you any money – When it comes to residential real estate, a hired Broker shares part of the commission with the homeowner. It works the same way in commercial real estate. The Broker representative and the occupier representative share commission. Broker’s are usually compensated by the seller or Landlord’s Broker.

 

1. They will represent the best price AND your best interest – A Landlord might not know some crucial facts about the building but a Broker would, since they have the time to conduct the necessary research. A Landlord might omit disclosing unfavorable things while discussing the property. A Commercial Real Estate Broker will be able to point you in a different direction if the property isn’t quite as advertised. 

 

1. A tenant might want to know what others in the building pay for rent. A Landlord would not usually give up this closely held information since it’s their fiduciary responsibility to get the highest price possible. A Commercial Real Estate Broker can. The benefit here would be making sure you are not getting charged unfairly. The bigger picture? They know what buildings to stay away from based on Landlord reputation. 

 

1. A Commercial Broker knows how to plan a space – Commercial Real Estate Broker’s have connections to outside contractors, architects, and furniture vendors to help you once you’ve decided on a property. Instead of having to do the research on who is the best and who is the most trustworthy, they can do it for you. Not only do they know who the best people are, they also know where to find the best prices.

 

1. A Commercial Broker is better at negotiating – After the final plan comes together, it’s time to negotiate the lease. This can turn out to be much more complex than you might think. You need to get something this important done right the first time. A Broker will know the going rate in the area and can make sure the calculations of the “load factor” are correct. Most tenant occupiers will go through 3-4 leases in the span of their real estate career, whereas a professional Broker does anywhere from 10-15 commercial leases per year. Bottom line: they have more experience than you do. 

 

A Commercial Real Estate Broker’s job doesn’t stop after the tenant moves in. They stay available to review rent charges Landlords make as operating costs of a property increase. They can cap what the Landlord charges and can make sure they are operational expenses, not capital expenses. You can breathe easy knowing you have someone trustworthy to turn to for market information and renewals. Because they are able to do all this, they will be the first ones tenants call when they need more space.

The Under One Roof advocacy group has published a  COVID-19 Rent Moratorium Response Video from their coalition of landlord, tenants and industry partners in the State of NY.

 

This video shares testimonials from property managers and landlords on how the proposed S8125A/A10224 Rent Suspension Bill will affect their business, employees, and tenants if passed.

 

 

The Corona Virus (COVID-19) has had an enormous impact on all of us.  These are trying times and it is important that we support one another as much as possible as we navigate this unprecedented event. With that in mind I thought I would update you on what is happening in the Commercial Real Estate market.

Commercial real estate remains relatively attractive as interest rates have fallen to historic lows. With the uncertainty in the stock market and low yields on bonds, commercial real estate has become appealing to many investors for its stability.

Some categories of commercial properties will be negatively impacted by the downturn in the economy. Office properties with longer-term leases are well-positioned to withstand the downturn. The multi-family sector may experience an insignificant impact depending on the unemployment rate in the short-term, while the demand for affordable housing units will continue. Industrial properties may be adversely affected as a result of supply chain issues, but next day delivery warehousing/logistics (Amazon) will continue to grow. Hospitality and transportation assets are stressed due to travel restrictions and cancellations across all sectors of the economy.

Before COVID 19, retail was evolving from your traditional malls by repositioning themselves with a larger mix of entertainment, hospitality and other non traditional retail use. The negative impact on the retail sector will be determined by the persistence of COVID-19. The small retailers will be impacted the most and there will be limited backfill tenants for vacancies. Once the current situation has stabilized, the retail sector may receive a boost from investors due to the low interest rates.

Transactions that were in escrow during the past 30 days are closing, but a few have also been postponed. Much of the interest has been in single -tenant investment opportunities such as Starbucks, drugstores and others.  It is not business as usual, but we continue to service our clients and address their needs.  We are reimagining the way we do business as we adhere to the health guidelines, directives, laws and Executive Orders from the Governor surrounding COVID-19.  Please do not hesitate to contact us with any inquiries, questions or concerns that you may have. We will do everything in our power to get you safely into buildings that you may be interested in, as well as any other needs you may have.

We wish you and your families all the best in the coming weeks and months ahead. I will remain in touch and update you as things progress.

 

Sincerely,

Bart

 

 

Barton K. Feinberg

Director of Brokerage, Associate Broker