In the first part of this two-part series I wrote about the advantages of leveraging the expertise and resources of a commercial real estate broker for sellers. In this second article I’m going to shift perspective and look at the benefits of a commercial broker for buyers.
In my experience, a lot of commercial real-estate buyers (and even some inexperienced brokers) have the misguided notion that buying commercial real estate is a very simple process, and that there are only a couple of pieces of information needed to find a “good buy.” If a broker only asks, “What type of business is it and how much square footage do you need?’’… then go find another broker. That’s like a doctor asking you what medicines you need. If a buyer is telling the broker what he or she needs, then that broker isn’t offering much value. A good broker will serve as a proactive consultant and guide the buyer to the best possible options – and the way to reveal the best possible options is with a thorough investigation fueled by questions. A broker should be asking many questions to learn as much as possible about the buyer’s business and needs.
While the “right” questions will differ depending on a wide range of variables, I’m going to use this article to highlight many of the most common and necessary questions to give you an idea of how many factors and details go into a quality buyer analysis.
A few buyer/tenant analysis questions:
- What type of business will you operate in this location? More specifically, how will you be using the space?
- Do you need separated spaces to perform different operations?
- Is this a new business or do you have a good sense of gross annual income so we can determine a range of affordability?
- How many staff members do you have and expect to have going forward
- Where does your staff live?
- Will you or your staff be traveling often? Will you host many out-of-town clients?
- Will you need easy access to the airport or main highways?
- Are you planning to expand? Do we need to plan for growth?
- Will you and your staff be in the office every day?
- Will customers come to your physical location?
- Do you need to be in a high visibility location?
- Are area demographics important to your success?
- Are aesthetics important for the exterior and interior?
- How much parking will you need?
- Will you be running computers and copiers that generate heat?
- Will you need conference rooms?
- Are there industrial and warehousing needs?
- Will there be noise concerns with your production process?
- Will you need special access roads and loading docks for large delivery vehicles?
- How will you move your products?
- Are there special transportation needs – roads, railway or river?
- What are your communication and Internet requirements?
- What are your power requirements?
- Are there waste disposal concerns?
- Is it a volatile business that might experience rapid fluctuations in business and staffing?
- Can we find you tax incentives to locate in specific areas?
This short list represents the tip of the iceberg. Depending on the type, size and requirements of a business, there could be hundreds of questions to answer before the actual search begins. Remember, effective brokers are not trying to sell you on a location, they are trying to get a clear understanding of your business and match your needs with the best “win-win” solution.
Grayson Powell is a Managing Partner at Coldwell Banker Commercial Sun Coast Partners (CBCSCP). CBCSCP leverages the vast experience of highly-skilled real estate professionals and developers and specialize in selling, leasing and managing retail, commercial, and investment property. To learn more about CBCSCP, visit www.cbcwilmington.com or call 910-350-1200.