Buying or leasing commercial real estate can be a complex and time-consuming process, especially if you go it alone. But how do you find the right commercial real estate agent to help you pinpoint the best location based on your target market, find hidden gems among a sea of commercial real estate listings, and then guide you through the twists and turns of purchasing or renting?
Aligning your goals with your realtor’s expertise and experience is crucial. By asking them the following seven questions, you can explore a prospective agent’s background and areas of specialization to ensure both mirror your needs.
What real estate area do you specialize in, and why did you choose it?
Like many other professions, real estate agents tend to gravitate toward specific sectors. Some will favour residential, while others will focus on commercial. Once they settle on commercial real estate, agents might lean toward involvement in retail, office, multi-family or industrial asset classes or deal exclusively with raw or vacant land. Lastly, some will centre their practice around helping clients sell properties, while others will specialize in assisting clients in buying or leasing them.
Gaining experience and expertise in a specific real estate sector is a strategic way for agents to develop authority on a subject, stand out from their competition and simplify their marketing efforts. But is it good for clients, or is it better to work with a generalist with experience across multiple sectors?
A case can be made for both, but one thing’s certain: the commercial real estate agent you want on your team should not only have deal-making prowess but be able to provide a deep understanding of the local market and available opportunities, problem-solve creatively under challenging conditions and leverage their network of connections to unearth prospects that others miss.
You can determine whether or not an agent has these qualities by asking questions like: “Tell me about a time when you faced a difficult situation, problem-solved creatively and created a win for your client,” or, “Tell me about a time you were able to leverage your network of connections to find a prospect that others had missed.”
Have you represented companies like mine before? If so, how many, and can you provide me with references?
Generalists might bring fresh perspectives to a problem that specialists can’t, but an agent who knows nothing about the sector you do business in or how the space, zoning or financing needs of a large pharmaceutical company might differ from a sole retail proprietor will likely eat up lots of your precious time asking for explanations about things they should already know.
On the other hand, an agent who works across multiple sectors and successfully represents a significant number of businesses similar to yours could offer the best of both worlds.
Reviewing a prospective agent’s references from companies in your sector, along with online client reviews and testimonials, will help you understand if they possess top-notch market analysis, communication and negotiation skills and whether they have a reputation for honesty, integrity and transparency.
What are your professional designations and certifications?
Professional designations and certifications give clients a better idea of an agent’s qualifications, skills and ethical standards.
Licensing requirements vary across Canada, but all provinces and territories require prospective real estate salespersons and brokers to pass a licensing exam. Many provinces and territories also require or make continuing education courses available to real estate professionals so they can hone their skills, stay up to date on current issues and ultimately, serve their clients better.
Specific designations to look for include:
- Certified Commercial Investment Member (CCIM)
CCIM is the industry’s most prestigious designation a commercial real estate professional can achieve. It recognizes expertise in commercial and investment real estate, financial and market analysis, user decision analysis and investment analysis. CCIM designees are bound by the strictest ethical guidelines and standards of practice in the industry. To earn the designation, each CCIM must successfully complete a graduate-level program consisting of 200 hours of education. - Fellow of the Real Estate Institute (FRI)
The FRI designation recognizes real estate practitioners who have acquired advanced skills and knowledge and met nationally-recognized business and ethical standards. The FRI curriculum enhances agents’ knowledge and skills in legal and regulatory issues, advanced negotiation techniques and professional ethics.Agents must have a valid real estate license for at least five years and be actively involved in real estate sales to pursue the FRI designation. - Certified Real Estate Specialist (CRES)
The Certified Real Estate Specialist designation recognizes an individual who is a proven top performer and who has demonstrated exceptional skills, training and experience.A CRES practitioner desires to obtain the very best deal for each client, and with this designation, has proven that their commitment has gone above and beyond any provincial licensing requirements. Agents must have at least three years of real estate sales or marketing experience and hold a valid real estate license to pursue the CRES designation.
- Certified Leasing Officer(CLO)
The Certified Leasing Officer (CLO) designation recognizes proven specialists in leasehold acquisition, disposal and administration. The CLO program prepares real estate professionals for the complexity of today’s real estate leasing decisions. Agents must have at least three years of creditable experience actively engaging in leasing activities for a minimum of 50% of their working day before being granted the CLO designation.
How does your company support you as a commercial realtor?
To be successful and help their clients achieve results, real estate agents need resources and support from the real estate company or brokerage they work for.
The key resources agents need to succeed include:
- An extensive company network of influential investors, developers and industry professionals that agents can tap into to help them secure the best deals for their clients.
- Marketing research and analysis tools that enable them to understand local market demographics and economic trends and advise their clients accordingly.
- Tech tools to help identify or promote properties.
- Administrative and legal assistance to help list properties or close deals in as timely a manner as possible.
- Access to ongoing education and training to build their expertise.
Who will I be dealing with throughout the process?
Working within a team is becoming more common for commercial real estate agents, and in a complex deal, it provides real benefits for both agents and their clients. Depending on the deal’s stage, you might be reviewing market analysis with one agent, touring prospective properties with another, and reviewing lease terms with someone else.
To ensure the entire team will be a good fit for your project, do at least a cursory interview of every agent you’ll be working with.
What’s your process for representing me in a transaction of this type?
Unlike their residential counterparts that can close in weeks, commercial real estate deals can take anywhere from six months to more than a year to complete. The best commercial real estate agents understand clients will need their expertise from the initial needs, location and market assessment stages through pricing, decision and negotiation periods right up to the final closing of the transaction.
As a client, you’ll want a more consultative versus sales relationship with your agent to feel confident they have your business’s best interests in mind during every leg of the project, no matter how complicated things get.
If you feel your project will be another notch on their belt rather than a feather in their cap, it may be time to consider another commercial real estate agent.
Choosing the right agent can make working through the often-complex processes involved in purchasing or leasing commercial real estate significantly easier. Armed with a pen, paper, and the right questions to ask prospective agents, finding one whose skills and expertise match your needs becomes considerably easier, too.
