When you think of real estate agents, you probably think about someone helping you to buy a new house. But residential real estate agents and commercial real estate agents are actually quite different—which means if you need a new location for your small business, it’s worth knowing what commercial real estate agents actually do.
In short, if your small business is looking to sell, lease, or buy commercial real estate, you’ll want to hire a professional commercial real estate agent. Here, we’ll provide a high-level overview of what they can do for you.
What Real Estate Agents Do
Residential real estate agents work with clients to find a suitable home and may help them negotiate a better price with the sellers. Like a residential real estate agent, therefore, commercial real estate agents are licensed to help sellers sell and buyers buy real estate.
But, commercial real estate tends to cost more than residential real estate and requires more of an investment from buyers. In turn, commercial real estate agents work with more parties and must work with considerably more information.
Generally speaking, selling or leasing commercial property also consists of a longer negotiation process. A commercial real estate agent exists, then, to provide buyers with market demographic studies, environmental research, and extensive financial analysis in order to be compliant with local laws and ensure the buyer’s business can succeed at a property and make sure they are getting the best value possible.
Although residential real estate agents may consider a property’s potential to appreciate value, there are significantly more moving parts for commercial real estate agents.
Let’s break down some more of the details of what these real estate agents do:
Market and Property Research
A day in the life of a commercial real estate agent involves a lot of research. They cold call business owners and managers to identify new potential properties for sale. They research new listings to see what properties might work for existing or potential clients.
They also gather statistical information both from cold calls and from clients to better understand the market. They research and analyze typical lease payments in different areas to get a firm grasp of benchmarks and opportunities around town.
The best commercial real estate agents go above and beyond the research, too. With the information they gather, they’ll employ statistical analysis techniques to help clients determine a basic margin of safety. They’ll even know the property maintenance costs and potential renovations needed on given properties.
With the amount of work that commercial real estate agents put in before they even show properties to clients, they make themselves well worth the investment for business owners.
When you’re looking to acquire a new property for your business, a commercial real estate agent is crucial. Business owners are primarily concerned with the commercial viability of real estate.
Commercial real estate agents, in that regard, act almost like financial advisors. They’ll be familiar with local commercial statistics and data, knowing the demographics of an area, the population, the median income, nearby competitors, and much more valuable information.
Also, considering most of a commercial real estate agent’s clients are likely small or medium-sized businesses, many will have insider information on emerging markets or how competitors have fared in certain areas.
Commercial real estate agents often have access to member-only listing platforms, giving them access to appropriate properties for potential buyers. Additionally, that member-only access can put them in line to negotiate a better purchase price and terms for clients.
Not ready to buy? The research and knowledge that commercial real estate agents have also makes them great resources if you’re looking to lease property. Alternatively, if you’re looking to lease extra space that you already own, a commercial real estate agent can help you find qualified tenants.
Whether you’re looking to be a lessor or lessee, commercial real estate agents can help connect owners and tenants and negotiate equally beneficial terms.
Commercial real estate agents don’t just work on the buying side. They’re also valuable cogs in the process of selling commercial real estate assets. Armed with extensive anecdotal and statistical knowledge of the market, commercial real estate agents help sellers identify the optimal listing price, find qualified buyers, and negotiate the best sale terms.
Working as the agent of the owner, commercial real estate agents will negotiate on the owner’s behalf and handle all responsibilities, from actually listing the property to overseeing inspections.
When working on the seller’s side, some of a commercial real estate agent’s responsibilities include:
- Determining the property’s value in the marketplace
- Advising the property owner on readying the space for listings and showings
- Scheduling and supervising property showings
- Entering the home on listing platforms
- Marketing the home on platforms, in print listings, and to their network
- Scheduling inspections and preparing any compliance or government-required documents
- Negotiating purchase or lease agreements
Commercial real estate agents are typically paid a commission of the final sale price or of the total rent for the term of a lease for their services.
The Bottom Line
Real estate agents help people find and purchase property that they love. In residential terms, that’s pretty straightforward. Commercial real estate agents, on the other hand, do a lot more heavy lifting for their business clients.
Small businesses that are looking to purchase or lease real estate have a significant amount to gain from using a commercial real estate agent—and hopefully, this guide will help you ensure your agent earns their commission. Be sure to find a reputable real estate agent in your area and consider asking around to your network of other business owners to find someone who will have your best interests in mind.