If you ask any commercial broker or agent they will tell you commercial real estate is different than residential. It is almost a cliche.  When hiring a residential real estate agent, it is much simpler and potentially more straightforward on who you are hiring. When you hire a residential agent, you can easily see how many properties they have sold, where most of the properties are located, and how similar your home is to the houses the agent has expertise in.  When hiring a commercial agent, it is just not that straightforward.  A lot of your standards will be based on your experience and knowledge about investing or developing in real estate; your knowledge likely dictates who might be the best fit for you. Does the knowledge and experience of the agent compliment yours?  When you are going to hire a real estate agent to work on buying, selling, or leasing space, here are some of the things you need to be asking them to ensure they can properly represent you:

1. Experience – Let’s start with the basics.  Whether you are a savvy commercial real estate investor or this is your first commercial real estate transaction, you want to be sure that the commercial agent you hired is not learning how to do the deal with your transaction.  Most new real estate agents who are committed to commercial real estate will have a mentor who has had many years of experience. Is that mentor a part of what the agent does all the time?  Questions you should ask your agent are: How many deals have you completed?  How many deals have you (or your team) done in the past year? What is the most similar deal you have worked on that is similar to my situation?
2. Knowledge – It is tough for anyone to be an expert in commercial real estate because the industry is so varied.  When it comes to valuing and marketing a property, a piece of land is very different than an office building or large apartment complex or working on an industrial lease.  There are so many different accreditations that exist in commercial real estate such as CCIM, MiCP, ALC, SIOR, CCA, etc. What do they signify?  While knowledge without experience is not worth much, you should want to hire a professional who takes their fiduciary responsibility seriously and that involves taking additional classes to be able to be a trusted adviser in any real estate transaction. These classes will teach an agent how to properly value a property on the development approach, the income approach, and how to find data to prove market trends in your area. Do they work with the demographics of the area ? Some questions to ask your agent are: Do you have any commercial accreditations? Are you a CCIM member? Can you show me a property on the market and tell me its value based upon the income approach? Do you know the going CAP rate for this property in this market? Do you know the difference between IRR and Cash on Cash returns ?  
3. Technology – Now we are starting to ask a higher level of our profession than most of the industry.  While there are many qualified commercial agents with years of experience and knowledge in the industry, how well they can service their clients needs in the 21st century is how well they have adapted to the rapid changes in technology.  A profession that used to be primarily who you knew, as most deals and information were not available electronically, has turned into an industry of big data.  While no one would hire a residential agent who did not know how to upload pictures online, commercial agents may not know of all the information and opportunities that exist online now and in turn miss out on vital information for your commercial deal. We tell our clients that 60% of all commercial deals never make it to commercial property exchange.  But that does mean that 40% do, and someone not versed in this avenue could be causing you to miss out on almost half of the opportunities. Some questions you may want to ask are: What property exchanges are you marketing on or looking in? Can I sign documents electronically through you and your team? Do you have reports with up to the date market information?  Can you show me one of your listings online? What does your online presence look like? 
4. Key Vendor Relationships – No real estate transaction just has one party involved. Also no individual will know everything you need to know about the purchase or sale. You really want to hire trusted professionals giving you advice and representing you in the transaction. You want someone in your corner who will go to the mat for you and, if they don’t have an immediate answer, will search till they find the right answer.  In residential real estate, having a great loan officer, home inspector, title company, and mover may be what you need at that time. In commercial real estate you might need so much more, people such as a lawyer or accountant, engineer, contractor, hard money lender, banker,  and environmental specialist. Does your agent have the depth on the bench, all the professionals you might need ? 
5. Key Owner/Landlord Relationships – A majority of commercial deals never hit the open market. Many landlords do not market the spaces they have and property/business owners have limitations to being able to market a property as available for sale (losing tenants or losing employees with the open marketing of a property). This means a commercial agent needs to know many of those players in the business because the best opportunity to find a space for lease or purchase may have to be done off market. This is not something you are going to be able to research, but it is a great question to ask before hiring a commercial real estate professional. How many spaces have you found clients that were not on the market? Who do you know who might have space that would fit my needs? (Note: please don’t be offended if they do not give you exact names or exact property addresses as these relationships and the confidentiality of those relationships are probably important to them)
6. Effective Problem Solving – Every transaction will have its challenges and problems that come up.  They are always different. What worked last time may not work this time for the personalities and/or circumstances. Your agent’s approach sometimes will be straightforward and logical, or it may be innovative/ outside the box. In general, commercial deals are more drawn out and have many different complexities to them.  You must ask, how do they keep it dispassionate and free of the emotional traps that can draw them in?  You can also ask how they overcame challenges in approvals, negotiations, financing, and environmental matters? A qualified professional will have examples for each, and will be happy to tell you about them.

In the end, business is all about relationships and integrity. You want someone to tell you the hard truth, good or bad; to give it to you straight! That is integrity – putting the client first, no matter what. In most instances, you will enter into a fiduciary relationship. A true fiduciary has already invested in their skills, knowledge, and experience, which will lead to positive outcomes in the transactions.  You have to trust your advisor, one hundred percent !  Challenge them, make them think about each thing, and draw on their knowledge and experience. Note that in the end, when they have all the attributes and your trust, you have struck gold!!

Written by Dave Garvey & Ethan Ash, Managing Director & Associate Broker