Connect with us

Hi, what are you looking for?

The American GeniusThe American Genius

Commercial Real Estate

Tenant leasing information – time to let go?

Time to let go?

Leasing and or tenant information.  Is this the true cre holy grail?  Why is this information held in such high regard?   What makes it so critical?  Is the information so sacred that it will never ever be revealed to the public?

Here is a quick summary of the way it is:

The brokers value proposition or “pitch.”

“We serve as your strategic advisor, lowering your real estate costs and occupancy risks while maximizing workplace flexibility and productivity. We’ll analyze your business drivers and occupancy needs, identify and evaluate appropriate options, and manage lease negotiations. In fact, we’ll be your on-call expert for all your leasing and lease administration needs.”  Pretty standard stuff and I am sure versions of this are used just about everywhere.

Brokers also gather and aggregate critical information and data.

As we sit here today that information is still directly held by brokers.  Let’s be honest, they are holding on to it for dear life. Brokers tend to be less forthcoming about some of the sensitive deal points of completed transactions. Term, renewal/escalation clauses, extra TI allowances, signage and expense provisions are critical and rarely disclosed items.

Advertisement. Scroll to continue reading.

Many commercial representation agreements include confidentiality provisions, so the broker may be prohibited from disclosing details of their work. If there are no confidentiality provisions they still hold that info back, maybe only sharing bits of the info with trusted colleagues and in a vague and opaque way. Hey, without that critical data what would happen?

What about the financial sector?

Once upon a time, to find out the price of a stock you had to call your brokerage firm. They had all the critical information needed to make a sound decision about a particular stock. When a real brokerage firm started providing the near real time prices on their website, they thought they wouldn’t need as many people in their call center, and reduced staff. 

What actually happened is that clients called asking more complex questions about trading strategies, not only did the clients have more interest in the stocks themselves, they needed even more guidance. Sounds pretty simple when put in that context.

It’s time to let it go.

In a market with great transparency, the only brokers that won’t be necessary are those that can’t provide those services (those that had been previously making commission checks by hoarding data as opposed to providing valuable service). The guidance of a good broker is essential, especially with the added complexities of commercial deals. What type of environment have we created for the cre clients? What is their real experience?

Does it really need to be tied to the source of the data? Having data transparency eliminates a major headache (data collection and verification) and frees up the brokers time to focus on their strengths: analysis and decision making.

Advertisement. Scroll to continue reading.

The market shifts?

Some may say this will NEVER happen. I disagree. At what point does the data not become a commodity?  When will a major brokerage or company not use that transparency as an advantage to let their brokers/agents or representatives compete in the marketplace?

My guess is soon very soon. Don’t think so? Tell me why!

CC Licensed image courtesy of Sean Dreilinger via Flickr.com.

Advertisement. Scroll to continue reading.
Written By

Broker/Owner in Lafayette, IN, whose passion is Commercial Real Estate with focus on Technology, Social Media, and Networking.

16 Comments

16 Comments

  1. Patrick

    June 22, 2010 at 10:36 pm

    Duke,

    Great article as usually. I couldn’t agree with you. At some point a company or individual will figure out a way to make all of this information readily available to the public for free. We as brokers can either be transparent now and be ready for the technology to catch up, or be left behind without a job in 5 – 10 years…. Or less….

  2. Coy Davidson

    June 22, 2010 at 11:21 pm

    I disagree, I have been around long enough to remember when the advent of the internet and the aggregation of listing information was predicted to be the demise of the tenant rep broker or even landlord reps. Developers/Owners could publish lease listing information and tenants would come to them directly. It didn’t happen. The broker that tries to compete today with the premise that he has the best data has already lost. This isn’t the 80’s.

    The comparison to purchasing a stock or security is apples and oranges. Your investment advisor has no ability to negotiate the purchase price of a security based on the volume of the purchase, the creditworthiness of the buyer, the term of ownership of the security. You buy it a set price or you don’t. The investment advisor counsels on what to buy and at what price based on its expected return price appreciation / dividend but there is no negotiation of the price per unit.

    Not only do brokers not want to disclose lease terms lease transactions publicly. I doubt the Landlords do either, not wanting a daily visit from some tenant complaining that some other tenant got a better deal.

    Not until the day the government mandates the terms of lease transactions must be recorded as public data are you going to see either brokers or the companies they represent willingly disclose that data. in fact I have more and more of my clients request that I don’t even provide any press releases on the transaction at all.

    Public companies are already required to disclose material lease commitments but the individual terms of each transaction are not required. I don’t see any change in this on the horizon. Basic and more detailed building data will become easier to obtain as technology continues its infiltration into CRE, but disclosing transactions terms publicly would be a monumental change…not during my career.

  3. Coy Davidson

    June 22, 2010 at 11:28 pm

    One other thing….I do see more transparency demanded from clients as to exactly what it we are doing for them….but then again the smart and most successful brokers are already being more transparent….that trend I agree with.

  4. Chris

    June 23, 2010 at 12:48 pm

    >> Having data transparency eliminates a major headache (data collection and verification) and frees up the brokers time to focus on their strengths: analysis and decision making.

    Well, you’ve said it – what practically every agent whines about until they realize that collecting and verifying data is not just about the data but about building relationships with landlords, owners, tenants, buyers and getting to know the market.

  5. David Bailey

    June 24, 2010 at 11:34 am

    Coy’s statement about Brokers and landlords not wanting to be Transparent is a good point. It is not in the landlord’s best interest to disclose lease terms and lease transactions publicly. However, as a Tenant Rep that demonstrates a reason why we add value. Our Job, as Tenant Reps, is to create transparency in the market to the best of our ability for our clients.

  6. Eric Odum

    July 13, 2010 at 6:14 pm

    I agree with David and Coy. Its hard for me to believe that transparency will become reality any time in the near future. Landlords and to a lesser extent tenants are fighting it tooth and nail.

Leave a Reply

Your email address will not be published.

The
American Genius
news neatly in your inbox

Subscribe to our mailing list for news sent straight to your email inbox.

Advertisement

KEEP READING!

Commercial Real Estate

When considering whether you should lease your office space or buy, an industry expert outlines the questions you should ask yourself.

Business Finance

(Financial News) New data out could help your business pick the winner between office and retail space, as both are posting gains, but not...

Tech News

(Tech News) Commercial real estate shoppers and practitioners are finally catching up as a whole to the advances in technology and mobile device use...

Commercial Real Estate

(Commercial Real Estate) The commercial real estate sector has improved substantially since the economy crashed, but is now showing signs of slowing, but data...

The American Genius is a strong news voice in the entrepreneur and tech world, offering meaningful, concise insight into emerging technologies, the digital economy, best practices, and a shifting business culture. We refuse to publish fluff, and our readers rely on us for inspiring action. Copyright © 2005-2022, The American Genius, LLC.