What is the most important question to ask when selecting a broker?
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Commercial real estate is a “relationship” business so tenants tend to work with brokers they know. Makes sense. Everyone knows someone in commercial real estate. It may be their kid’s little league coach, college roommate, neighbor, relative or someone they sit next to on the commute train. And often, that’s who people work with for their first few office leases.
But there is a built-in conflict of interest in office leasing that few tenants understand and even fewer brokers discuss. More than 90% of the commercial real estate brokers represent both landlords AND tenants. No one would hire a lawyer who works for the other side. Yet, the equivalent happens every day when tenants work with commercial real estate brokers and firms that also represent landlords.
So, ask your broker if they or anyone else in their office represents landlords.
If so, you have a built-in conflict of interest. Firms that specialize in tenant representation are only focused on finding value and multiple alternatives for their clients. If your broker isn’t finding you multiple alternatives, then you either have an underperforming broker or a broker with a conflict of interest.