Are you leaving money on the table?

Photo Courtesy: Mark Matcho

Photo Courtesy: Mark Matcho

How much money are your leaving on the table in your real estate transaction? Commercial real estate industry information indicates that a savings of 10-20% of total facility expense can be achieved through better lease management and process orientation. That percentage adds up to a serious amount, and could have a direct effect on your bottom line. As commercial real estate becomes increasingly complex, those with little experience should not try to solve their real estate solutions without considering the help of a real estate professional that can provide you with the proper tools and processes. Having the right tools and processes is a Win-Win; saving the company money and taking stress out of the transaction.

Having the right systems in place is so important that 57% of executives said that they may be leaving money on the table by having inadequate real estate processes and controls. This statistic came from a survey performed on non-commercial real estate executives about the areas of real estate that are the most confusing, problem inducing, and mismanaged (p. 22, Survey performed by Cardinal Real Estate Partners; link to survey). The purpose was to uncover the issues executives were facing and to identify what tools were readily available to aid in providing clarity to complex real estate situations. Given this high percentage of executives that agree that there are ways to improve the processes by which they handle their real estate it is clear to see that you as well could benefit from being well prepared.

Preparing for your real estate needs does not require a degree from an ivy league school, but it does require that you seek out the right team as well as resources leading up to your transaction. Interestingly enough, according to the survey mentioned above, 55% of all respondents do not go to brokers to receive most of their commercial real estate advice (p. 21). So why is it that those in the C-Suite have such distrust for commercial real estate brokers? The survey states that the majority believe that the broker offers support but not as much as the company leader desired or expected.

The best way to get your broker to offer support continually throughout the entire transaction is to set up the agreement that aligns your interest with yours. One that aligns their fee with your opinion on the outcome of your transaction. This “fees-at-risk” method is generally reserved for larger clients (i.e. Bank of America), but remember no commission percentages are set in stone, as per the rules set forth by the real estate commission.

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