The following piece was written by David Sobelman - Executive Vice President of Calkain Companies.
It goes without saying that net leases are one of today's most coveted investment vehicles for high net worth investors and their institutional counterparts - with high demand and low supply. We can write countless articles on the merits of the investment and get really fancy by quantifying different metrics for single tenant properties, but everyone has their own spin on the data points. Don't get me wrong, the data is important but I think we are forgetting the intangibles that go into a sound and trustworthy brokerage relationship. If there has ever been a time that investors need a broker - it's now. However, due to the severe lack of inventory on the open market, many firms are making an effort to work by themselves. A seller should know that strategy only benefits one person - the broker.
From the first day I began in NNN properties ten years ago, I was always taught its good business to offer a fee to another broker if it means getting a better deal for your client. It was explained that "While you may become very good at what you do and have a large pool of clients in which to work, you still won't know everyone." That one person who may pay a little more due to their specific circumstances may be lurking under the auspices of a colleague that has been working with that particular client for the previous two decades. In essence, the lesson was to take a little less money now, generate the best return for your client and develop an infinite amount of goodwill for future transactions. If the property is for sale and there is nothing truly confidential, it should be exposed to as many people as humanly (and electronically) possible. It is counterintuitive to deny another broker the opportunity to present your property to their buying client.
I completely understand the competitive nature of brokerage and know business models vary between the firms. However, my clients have made more money, been recognized more by their peers and have had greater success for themselves by working with a fully vetted investor with access to all available listings - regardless if I procured them or another broker was involved. Turning off access to your client's property(ies) in order to pocket list from other brokers is a habitual protocol that seems to be self-serving, rather than client-serving. Therefore, I invite investors to call their brokers and ask some very pointed questions about how they represent clients. What is their system, their approach, their model? How will you know who has your best interests in mind and who is ultimately working on a deal-by-deal basis?
Each firm will have a different model on how they operate within the net lease brokerage environment. But when you call to solicit a proposal, make sure to ask not only about previous performance, reputation and commissions but if they have adopted the fact that we work in a global market, one where someone outside of their sphere can be seamlessly reached and provide the best pricing for your asset. In essence, ask your prospective broker if they are both communicative and forthcoming with the merits and marketing of your property in order to produce the highest dollars for you.
David Sobelman is Executive Vice President of Calkain Companies and the opinions here are his alone. David can be reached at [email protected].
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