Term
| in commercial real estate, how does a specialist differentiate? |
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Definition
type of property—office, retail, industrial, residential income, land, etc.
type of client—buyer, seller, owner, tenant, investor
type and size of transaction—sale, lease, option, etc.
geographical area—neighborhood, trade area, quadrant, suburban, etc. |
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Term
| The services that a commercial and investment broker can provide may be divided into three broad categories: |
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Definition
| brokerage, advisory, and property management. |
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Term
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Definition
Brokerage services generally involve either the sale or the leasing of real estate. A broker can become involved in a transaction in:
sales -- representing the seller or the buyer
leasing -- representing the landlord/owner or the tenant |
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Term
Advisory services
Brokers can provide other services besides transaction-driven brokerage. Some advisory services that a broker can offer are: |
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Definition
| loan workouts, lease buyouts or restructuring, financial analysis for the property owner, broker's opinion of value |
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Term
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Definition
| a broker can restructure loan agreements that will work for parties involved in a transaction |
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Term
| Lease buyouts or restructuring |
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Definition
| tenants may use the services of an advisor to help them accomplish their downsizing or expanding objectives at the lowest possible cost. Likewise, landlords may use a broker's advisory services to help their tenants adjust to downsizing or expansion, and to preserve or create as much value in the property as possible. |
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Term
| Financial analysis for the property owner |
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Definition
| institutional and private owners often need a financial analysis to forecast income and expenses. The financial analysis could include refinancing alternatives to maximize an owner's return on investment. The service could also include various kinds of sensitivity analysis (analysis under differing assumptions). |
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Term
| Broker's opinion of value |
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Definition
| property owners, lenders and government agencies often need an opinion of value to make financing decisions, but they do not always need a formal appraisal. A broker can provide this service for a fee. |
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Term
| Development and construction |
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Definition
| a broker with the necessary expertise can act as a consultant or project manager for a client who is developing or improving a property. |
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Term
| Highest and best use analysis |
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Definition
| owners of vacant land often need a broker to analyze the property for its highest and best use. This analysis can provide the owner with direction as to how to develop the property, and it can point to the types of buyers most likely to purchase the property. |
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Term
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Definition
| commercial property users who are interested only in occupying and using space for their core business purposes may not know whether it is better to lease or own their space. A broker can perform an analysis to determine which of these alternatives will create a lower occupancy cost. |
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Term
| Real property tax reduction |
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Definition
| brokers who understand the tax laws can negotiate with governmental agencies on a client's behalf to reduce the assessed value of the client's property. Any reduction in assessed property value consequently reduces the client's real estate taxes on the property. |
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Term
| List the ways that a commercial broker might specialize in a large market. |
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Definition
| By property type, client type, transaction size and type, geographical area, and combinations of these. |
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Term
| What does it mean to specialize by client type if one is a commercial broker specializing in office properties? |
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Definition
| Client type in this context refers to the “side” of the transaction—whether one is representing the seller/lessor/landlord side or the buyer, lessee side. |
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