Help settle an argument: is negotiation tedious or fun?

Question

Hey everyone! My friend and I are both students thinking about commercial/corporate real estate and we got into an argument:

In your opinion, are CRE negotiations generally one of the more irritating/long-winded parts of the job, or is it easy/fun?

Michael Eskenasy · Answer

Neither, honestly.

Good negotiation isn’t really tedious or exciting — it’s mostly information gathering.

The actual “negotiation” part is usually the shortest piece. Most of the time is spent figuring out what’s actually driving the other side’s decisions. Price is only one variable. Timing, debt pressure, partner dynamics, tax situations, and even simple things like fatigue with a property can matter more.

Once you understand those constraints, the deal structure tends to fall into place pretty quickly.

If you don’t understand them, then negotiation feels tedious because you’re just going back and forth over numbers without solving the real problem.

The people who enjoy it usually enjoy figuring out the situation, not arguing over the terms.

Chip Hilton · Answer

Thanks, that's an incredibly helpful answer! Appreciate the insight... it makes a lot of sense

Greg Kasmer · Answer

@Chip Hilton - I agree with Michael's thoughts. The other item that can be challenging is who is communicating with the seller. If you have a broker and/or agent involved their communication style is paramount to getting your perspective understood. In working directly with owners (i.e. Off Market) you obviously have more control in the process. Good Luck!

Caleb Brown · Answer

Negotiations to some might be fun but it's figuring out a solution to go forward. Sometimes that is irritating depending on who's involved and the factors. I think removing emotions keeps it level headed and you can better find a solution

Henry Clark · Answer

Depends on what type of business plan.

Location:

If it is purely local and location driven, negotiations can be more involved.  You have less power as the buyer.

If regional and flexible, then negotiations are simple.  We do Self Storage and have scaled within a 40-mile radius.  When we get ready to expand, we will look at about 3 different location options.  Then we line them up and start making 3 day offers.  You have greater power as the buyer.

Existing business or just footprint.

Financing impact depends on if you are already financed or if you're looking for Seller financing.  Seller financing will be more involved.

You made a comment "Parts of the job".  If you're talking about being a Broker versus investor, then how tedious the deal is, becomes how well you collected information and positioned the property up front.  Then understanding the Buyers needs.  Your value as a Broker becomes having a list of potential buyers and understanding their desires.

Chip Hilton · Answer

Thank you!

Help settle an argument: is negotiation tedious or fun?

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