You get a new listing on a piece of commercial real estate and you are so happy! You’ve heard about the large commissions for commercial real estate so you want to handle this listing right.
You put in on the MLS, post a sign, add it to the Realtor caravan, and send out just listed postcards. 30 days pass and you have very little activity. You decide to have an open house. A few of the neighbors trickle in but no serious interest. You even get the client to agree to a price reduction. You get a couple of more showings but that’s it.
Your long term client with whom you’ve sold many homes is very disappointed in you and cancels the listing. They list it with a commercial broker and the property closes about 90 days later.
What went wrong for you? If you read my Ten Things You Need to Know About Commercial Real Estate, you would know that commercial brokers are generally not members of the local Realtor board. Consequently, they do not use the MLS. Since a buyer of commercial real estate will often use a commercial broker, leaving the property out of view from commercial brokers is a huge oversight.
December 2006
Provided by Sheryl A. Smith, CCIM, CEO of Smith Real Estate Services
Sacramento Retail:
- Street Retail had the highest average asking rent of $2.13psf/mo.
- Average Asking Sales Prices have come down about 3.9% since mid 2006, across all retail property types.
- About 52% of the listed retail properties are between 5,000-24,999 sf.
- 14th lowest retail vacancy market in the USA for Q4/2004.
Average Asking Price by retail building size
5,000-9,999sf $258 psf (31% of available property listed)
10,000-24,999sf $224 psf (22% of available property listed)
25,000-49,999sf $192 psf (7% of available property listed)
1. Most commercial “brokers” are not brokers. They call themselves brokers because they broker the deal, but many hold a Salesperson’s license, which actually makes them an agent. By law, a salesperson or agent must hang their license under a broker. A licensed broker can elect to put their license under another broker; however, a salesperson does not have the option.
2. Most “brokers” that work for commercial brokerages without a residential arm are not Realtors. A Realtor belongs to their local real estate board. Historically, the local and national real estate boards have done little to support commercial real estate, though that is changing. Consequently, commercial brokerage houses generally do not join the board of Realtors;
3. A title like Vice President generally means they have achieved a certain level of sales volume, not that they are managers of people;
4. Land is considered commercial real estate;
5. The license for a commercial salesperson or broker is the same as for a residential salesperson or broker. That means that anyone with a license can sell either commercial or residential. However, it is more common for a residential agent to sell commercial than the reverse. Commercial “brokers” understand that the two businesses are very different and would generally prefer to stay within their area of expertise;
