5 Questions to Ask Before Hiring a New Leasing Broker
Leasing your industrial building can feel daunting. With the right team in place, the process can be infinitely smoother. But how do you know who to add to your team? How do you find the “right” leasing broker to help you find the most qualified tenants?
Here are a five important questions to ask before hiring a new leasing broker for your commercial or industrial property.
1. Does this leasing firm have a good reputation? This is a question to ask yourself—not the broker. It’s an important step in your due diligence process. Start by researching the company online. Read reviews posted by previous clients. Investigate how often the firm’s brokers are called upon to speak as experts in their field – this could be on industry panels, in news articles, in market insights and more. Don’t be afraid to ask the firm for client references, and then follow up on those references. Just as you’d look for tenant references, you should be calling upon broker references, too.
2. How well does this firm know the local market? It’s important that the broker you hire understands the nuances of your local industrial real estate market. Industrial real estate is a hyper-local industry. For instance, a major industry in one submarket may drive local demand – demand that may not be as strong in neighboring communities. Probe by asking the broker answer a few basic questions – and see how well they can answer these questions off the top of their heads (and then check for accuracy!):
· What is the average rental rate and vacancy rate in this market?
· How long do commercial and/or industrial properties tend to sit vacant in this market?
· How often do properties turn over in this market?
· Can you identify any local comps that would be considered competitors to my property?
· What types of tenants do you see as being the best fit for this property?
3. How well does this firm know your specific property type? A brokerage firm may be one of the “top” in your market, but if you have a specific asset type that you’re looking to lease (warehouse space), it’s important to work with a broker who really understands the nuances of that asset class – and has experience leasing that asset class. The top multifamily broker, for instance, won’t know the specific criteria that industrial users are looking for – like the weight rating of floors, criteria around ceiling heights, loading docks, sprinkler systems and more. Ask for very specific examples as to properties this firm has leased that align with your property type.
One of the biggest mistakes Landlords/Sellers do in the market is to hire a family member or friend who does residential estate and expect to lease or sell warehouse space. There are many horror stories of owners getting bad tenants or selling below market because they hired an agent who has never leased or sold an industrial building.
4. What channels would the broker use to market your property? You want to be sure to reach the broadest array of tenants possible when looking to lease your space. But it’s not just about reaching the most people, it’s about converting the most highly qualified people into potential tenants. Ask the broker a few specific questions about marketing:
· What online tools would you use to market my property?
· Do you employ a professional photographer to capture properties in their best light?
· What off-line channels would you use to market my property?
· Are there any special techniques, programs, platforms, or technologies you’d leverage to make my property stand out?
We’re starting to see more brokers utilize drone videos, for instance, to help market industrial and commercial properties. This is something to look for when interviewing potential leasing brokers.
5. What other services does this brokerage firm offer? Depending on your specific needs, you may want to engage the services of a comprehensive brokerage firm – a team that offers more than just leasing services. For instance, some of the full-service shops offer everything from project leasing to property management, from investment services to project management. The latter, for instance, can be incredibly helpful for investors that are contemplating some sort of complicated TI project or fit-out for prospective end users. Working with a full-service shop can help you streamline all of your investment property needs.
Before you sign an exclusive agreement with a broker, be sure to ask thoughtful questions to ensure the broker (or brokerage firm) is best equipped to lease your property effectively. Anyone can lease a property, but it takes skill to lease or sale a property to a high-quality prospect for top dollar in a short amount of time. This is the trifecta that all brokers strive to achieve, but only the best rise to the top.
For more information or for a free confidential consultation on leasing or selling your industrial building, contact the Miami Industrial Team at 786-433-2380.