A commercial real estate broker (also known as a commercial broker) is a licensed real estate professional, who assists clients in purchasing, selling, or leasing commercial properties. Licensing requirements for practicing in commercial real estate are essentially like those of residential real estate agents. They differ in that they serve different types of clients and property types. Residential professionals deal in residential homes mostly, whereas commercial professionals work within the realm of commercial properties such as retail plazas, commercial buildings, and business offices. They deal with not only purchasing or selling, but also tenant leasing and assisting landlords. A commercial real estate broker is licensed to maintain and run their own business and manage the commercial agents working under their company/brokerage umbrella.
The job of a commercial real estate broker is also to provide expert business and financial analysis of current market conditions, key financial factors, and to negotiate the best terms for their client. They manage all aspects of a lease or sale and strive to negotiate the best price possible.
The scope of work for the commercial broker.
A commercial brokers’ area of expertise and focus, depends on their specialty and the clients they are representing. There are several types of commercial properties such as those of healthcare offices, industrial businesses, warehouses, retail plazas, business offices, multi use dwellings and so on. Often, commercial brokers may choose to only represent landlords and sellers, while others prefer to only represent the interests of tenants and buyers. And still, there are those that choose to work for both.
Tenant Representation
In tenant representation the brokers’ job is to find space that meets their clients’ current and future business needs, and represent them in lease negotiations to ensure they get the lowest prices and best terms possible. They have in-depth market knowledge, as well as access to online databases to search available properties (e.g., Costar & Loopnet). They have access to site selection tools, for demographic and consumer spending indicators, such as gender, age, income, and spending. A commercial real estate broker will keep you informed of all the latest market developments and will keep you informed about the most up-to-date market statistics.
The broker also keeps current on financial trends in the area and possesses a wealth of information about the property market. They inform you if a property is priced fairly, because they have access to all commercial listings. They provide valuable insight into how much a potential client should pay for a space.
A commercial real estate broker will analyze lease payments, including the negotiated terms and conditions of the lease. Their job is to find the right space for their client, avoiding financial and legal risks, while negotiating the best deals. Once they’ve found the perfect space, they will work with the landlords and tenants to make sure the deal is done legally and fairly.
When searching for a commercial property for a client, the following are things a broker will be searching for:
- That the building has enough space to accommodate the current and future needs
- Expansion options in the building
- Technology the building offers
- Proximity to major highways and public transportation
- Proximity to restaurants and conveniences such as day care centers, salons, dry cleaning etc.
- If the client desires, locations with foot traffic
Landlord Representation
When representing landlords, the commercial brokers’ job is to bring tenants’ or buyers to a building, and ultimately to secure tenants who are a good fit for a space. They are also responsible for keeping the building owner updated on the latest developments and market statistics. They assist the owner and asset manager in determining the highest price possible for which they can lease or sell a space/building and help them with financial analysis.
Information About Brokerage Services
- Client’s interest above all others, including the commercial broker
- Inform client about property details and any pertinent information
- Answer all client questions and present all offers
- Treat all parties to the commercial real estate transaction fairly
How to Become a Commercial Real Estate Broker
If you want to become a commercial real estate broker there are several steps you must follow.
- Obtain a real estate license
- Find a commercial real estate company to work for to get on the job experience in your desired niche
- You must have at least 4 years experience as a licensed sales agent
- Must take and pass the real estate brokerage classes and exam