All Forum Posts by: Christian Decker

Congratulations on getting your license! That is very exciting! I am a Commercial real estate agent myself and this is from my experiences. 

First thing though is to decide what you want to do. Do you want to lease office space? Retail Leasing? Industrial Leasing? Investment sales? Multifamily? Industrial? There are a lot of "sub classes" to commercial real estate and you should decide at least a direction of what you want to do. In addition, each sub class has different lead times on getting paid. Sales you usually get paid at closing, but if you go the development sales route that could be 3 years (or more). Retail and office leasing in my market you often times get paid half the commission at lease signing, then the other half when the tenant opens for business which can be measured in months or years (yes really). So make sure you have your savings in order before making the jump.

In terms of joining a commercial brokerage. You could join one of the national firms (Colliers, Newmark, CBRE). Doing this will be the fastest way to put money in your pocket because they will have you join as a runner as part of a team. You will not make much money but it will be something and you will get experience in the field. Then, as you prove yourself you will be able to move up, get on the signs and start making a commission. If that does not sound appealing you can try and join a boutique firm in your area. These are usually more flexible and can go straight commission right away (this is what I did). You then sink or swim off of your abilities, but you have very little guidance or hand holding. Some boutique firms might let you join a team where they give you a split of the commission so you are able to make some money as you learn, but you need to convince the team that you are going to be an asset that will make them more money then the splits costs.

Next, you will want to look at the split. Splits are confidential at each brokerage so I'm not going to get into that on a public forum but make sure you ask.

Finally, be persistent. Your first hurdle is getting the interview. Find the decision maker and prove to them you can make it in this industry by being pleasantly persistent. This could mean calling every brokerage head 2 times a week for 30 weeks (i am not kidding). Commercial Real Estate can be very cutthroat business, even more than residential, so you need to prove to them you can make it in this world

Feel free to reach out if you have more questions! Good luck!

@Benjamin McCrite
Congratulations at finding opportunity! Personally I love buildings that are 50% to 100% vacant because it holds opportunity, but I'm also an expert in Commercial real estate. It is what I do exclusively on a daily basis. I know my costs and my market. Commercial real estate is valued specifically off of the Net Operating Income (NOI). Higher NOI, higher value of the building. Vacant buildings are typically valued off of a pro forma NOI once factoring in down time, Tenant Improvements, Leasing commissions, etc.
This is when you want to find a Very Good leasing agent. Ask them what the building can lease for and what to expect on expenses. If you are wanting to keep it medical dental, be prepared for a looooong lead time on the leasing. Think of it this way. Anyone can rent an apartment so your "renter pool" is fairly large, but there are only a handful of dental or medical professionals moving out of a current location, expanding or starting new practices. This is the risk of commercial real estate. 
I own a 14,000sf medical dental building and am a Commercial sales and leasing broker so I know the industry very well. Let me know if I can help anyway! 

@Kevin Reinell
I'm a commercial real estate broker in Seattle, so some thoughts from a broker. In terms of finding a broker, try to find those who are active in the market. Drive around and look at for sale buildings that fit what you are looking for and call those brokers and try to connect with them. Once you have found a few, if you can find one that owns rental/investment properties of their own that is going to be gold for you because they have gone through the buying process personally, and when you have money in the game you know it better than just a commission (trust me).
Once you have found that broker there are 3 things you can do to make you the #1 contact. 1) Get back to them FAST. Be a fast no, and a slow yes. 2) When you say yes, follow through (within reason) and 3) be patient, finding good property especially in the commercial world, takes time.
Happy to answer any other questions you may have!

NOI is also important when valuing the property if it is done for either a commercial loan or sale. Your mortgage, unless the buyer assumes the loan, will be very different for the buyer. Its important for them to know the expenses of the building, then they can make decisions about their financing and such.

If this actually goes through, it will kill the Commercial Market. As an agent and investor in commercial I am very interested to see what the unintended consequences of price and market will be on this for the retail and office sectors. 

@Greg Gaudet

No worries! I think I found someone to do the trick. My title agent recommended James Geiger. I was a little concerned calling Shannon and Rebecca since they represent HOA's and there was a higher chance of a conflict of interest.

@Loren Clive

Wow! That is significant!

Hello!

I have a fairly complicated title and HOA situation on the West side of Maui, Hawaii. Does anyone have a good attorney recommendation for an attorney who can handle litigation with HOA's along with title issues on a condo that have both land court and leasehold interest involvement? Unfortunately I cannot go into much detail in a public forum. This HOA often requires Non-Disclosure Agreements.

Thank you in advance!

@David Williams

The 6% is not attorney fees. That’s if they use commercial brokers. It may be different where you are but that’s what I budget for brokers on my properties.

@David Williams

You can always ask! It is a very reasonable question and fairly expected.

They likely want the 10 year lease because that adds value to the building. You can get a better rate on the loan when there are longer term leases.

Don’t be discouraged if the landlord pushes back on an early termination. Remember, they will likely pay around 6% in releasing fees plus $20-$50/sf in tenant improvements (market dependent). Not counting lost rent.

Hi David, there is a lot in there!
Background on me and where I am getting my information. I am a Commercial Broker that does leasing for Retail and Office (along with sales, but that's not applicable here) in the greater Seattle Area. I also own multiple retail and office buildings in the greater Seattle area. Please also note that I am not an attorney and not giving legal advice.

Now with that all said lets get into your questions. First, everything in real estate, especially commercial, is negociable. Contact an attorney that does commercial leases to represent you and to have review the lease. They will be able to answer your question the best and you will have someone to represent you if things go sideways. Second, contract a commercial broker in the area and get a market overview (they will do this for free). It will give you an idea of what is "Market Rent" and that you truly are getting the deal you want. In Seattle, 10 year leases are actually fairly common (I signed one very recently with a client). In addition, you might be getting the best deal possible now and want to lock that in for 10 years. Naturally it depends on what other bumps you have built into the lease. Is this a brand new lease or an option to extend?

If you are looking for a right to vacate there are a few options. 1 is to have an early termination clause, second is the right to sublease, and third is right to go dark. There are many other ways to do it but these are the most common. An early termination clause typically states that you have the right to terminate/break the lease and walk away, typically with 180 day notice and a fee of 3 to 6 months of rent. They can be spread out with an option at years 3, 5 and 7 with varying costs to break the lease. Second option is subleasing which I saw you mention. With a sublease you are still responsible for the base rent. In addition, some leases state that if you are able to get more for the space, you owe the landlord the increased full amount. Finally, if the sublessee damages the space or disappears, you are still responsible for the lease and returning the property in the condition specified in the lease. Third is the right to go dark. My retail leases specifically say that a tenant is not allowed to go dark. This is for the synergy of the center. Be careful with that. Now, I am not an attorney nor am I in Colorado, talk with an attorney or local commercial broker for local and legal advice. 

I know this is a lot of information, let me know if you have additional questions and I will help as I can! An opportunity to take a 10 year lease at below market rate is a very good opportunity!

Thanks!