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Tenant Rep Forum Saturday, November 5, 2005 The Politics of Commissions: Getting Hired, Getting Paid Andrew B. Zezas, SIOR REAL ESTATE STRATEGIES CORPORATION NEW JERSEY. 2005 Fall Professional Conference.

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Tenant Rep ForumSaturday, November 5, 2005

The Politics of Commissions:

Getting Hired, Getting Paid

Andrew B. Zezas, SIOR

REAL ESTATE STRATEGIES CORPORATION

NEW JERSEY

2005 Fall Professional Conference




Tenant Rep Forum or do better for your clients?Saturday, November 5, 2005

The Politics of Commissions:

Getting Hired, Getting Paid

Andrew B. Zezas, SIOR

REAL ESTATE STRATEGIES CORPORATION

NEW JERSEY

2005 Fall Professional Conference


Andrew b zezas sior
Andrew B. Zezas, SIOR or do better for your clients?

  • President & CEO - Real Estate Strategies Corporation

  • 22 years in corporate real estate, 3 years in SIOR

  • Experience in office, industrial, technology, landlord, tenant, and advisory services

  • Former Senior Managing Director for international real estate brokerage company

  • SIOR Tenant Rep Specialty Practice Board Chairman

  • Advisor, publisher, author, leader, learner

    • NAIOP Creative Deal of the Year Award

    • William Dorsey Client Service Excellence Award

    • Ernst & Young Entrepreneur of the Year Finalist

  • “The best time to plant a tree was twenty years ago…the second best time is today” Chinese Proverb


Andrew b zezas sior1
Andrew B. Zezas, SIOR or do better for your clients?

  • President & CEO - Real Estate Strategies Corporation

  • 22 years in corporate real estate, 3 years in SIOR

  • Experience in office, industrial, technology, landlord, tenant, and advisory services

  • Former Senior Managing Director for international real estate brokerage company

  • SIOR Tenant Rep Specialty Practice Board Chairman

  • Advisor, publisher, author, leader, learner

    • NAIOP Creative Deal of the Year Award

    • William Dorsey Client Service Excellence Award

    • Ernst & Young Entrepreneur of the Year Finalist

  • “The best time to plant a tree was twenty years ago…the second best time is today” Chinese Proverb


Brian netzky sior
Brian Netzky, SIOR or do better for your clients?

  • Boutique Industrial Tenant Rep firm

  • Industrial users are entitled to expert representation

  • Specialize in clients that lease 100,000sf and up

  • 100% Exclusive Rights to Represent; 100% Commission agreements

  • Earn full fees on renewals

  • Utilize SIOR network to provide ‘Best in Class” service across the U.S.

10


Steve Morris, SIOR or do better for your clients?

  • Active in commercial brokerage since 1975

  • Founded Strategis in 1982

  • Founding partner in GVA Worldwide

  • Provides in-depth, multi-service processes

  • Consulting and transaction experience –office, technology, research, education

  • MBA Program instructor at University of Michigan

  • Teaches real estate finance for CoreNet MCRE Program

  • 2000 Broker of the Year – University of Michigan / Urban Land Institute Real Estate Forum

11


Tenant Rep Zoomerang or do better for your clients?


Tenant rep zoomerang
Tenant Rep Zoomerang or do better for your clients?


Tenant rep zoomerang1
Tenant Rep Zoomerang or do better for your clients?


Tenant rep zoomerang2
Tenant Rep Zoomerang or do better for your clients?


Tenant rep zoomerang3
Tenant Rep Zoomerang or do better for your clients?


Tenant rep zoomerang4
Tenant Rep Zoomerang or do better for your clients?


What We’ll Discuss Today or do better for your clients?

  • 8 Steps to Getting Hired

    More Often

  • 5 Key Parts of the

    Tenant Rep Agreement

  • 6 Most Critical Components

    of a Commission Agreement

  • 4 Steps to Getting Paid more,

    more often

  • Ask a lot of questions, share your ideas!!!


What is a tenant rep
What is a Tenant Rep? or do better for your clients?

  • Corporate Acquisitions and Dispositions

  • Advisory and Consulting


What is a tenant rep1
What is a Tenant Rep? or do better for your clients?

R-e-p-r-e-s-e-n-t-a-t-i-o-n,

not

deal-making


Getting Hired or do better for your clients?

What makes commissions political?


Getting Hired or do better for your clients?

Can you walk away from a bad customer?

Better Asked: How much will you pay for

the opportunity to lose a commission?


Getting Hired or do better for your clients?

Most Brokers!


Getting Hired or do better for your clients?

What your customers want!


Getting Hired or do better for your clients?

Why do your customers choose you?

How do you differentiate yourself?

Most “differentiation” … isn’t!


Getting Hired or do better for your clients?

Why do companies seek commission discounts?


Getting Hired or do better for your clients?

Are you a discount real estate company?


Getting Hired or do better for your clients?

Wouldn’t you prefer be known for providing great service and be paid your real worth?


Getting Hired or do better for your clients?

“Your culture is your competitive advantage!”

Jason Jennings


Getting Hired or do better for your clients?

Are you loyal to your customers? Do they think so?


Getting Hired or do better for your clients?

Conflicts of interest, like representing a lot of properties, make tenant representatives appear disloyal!

What if your attorney was buddies with the opposing attorney?


Getting Hired or do better for your clients?

Are your customers loyal to you?

“Satisfied customers leave”Jason Jennings


Getting Hired or do better for your clients?

When should you offer discounted fees?

The lower priced service should always win…right?


Getting Hired or do better for your clients?

If you must compete on price you have no customer loyalty, and no differentiation!


Getting Hired or do better for your clients?

If you offer a low price and still lose, you’ve given the customer no reason to hire you.


Getting Hired or do better for your clients?

  • Never work without a written representation agreement

  • Present the idea of a letter of engagement at your first meeting


Getting hired
Getting Hired or do better for your clients?

Give your clients multiple reasons to feel comfortable hiring you

  • Permit them to fire you!

  • Disclose your commissions


Getting Hired or do better for your clients?

Out of the blue!


Getting Hired or do better for your clients?

Question: What is the best service that’ll ensure you’ll get hired?

Answer: What are your clients looking for? Ask them!


Getting Hired or do better for your clients?

  • Walk away from bad business and bad clients!

  • Commercial real estate services industry in too generic…DON’T BE GENERIC!

  • Don’t compete on price!

  • Your clients don’t want one-size-fits-all services…Know what your clients want…Ask them!

  • Don’t be a trained seal…Land the plane without landing gear!

  • Your clients don’t care about real estate. They care about their businesses…Offer services that’ll support what’s important to them!

  • Without a relationship, you probably won’t get hired…Build relationships based on sound business principles, not just golf!

  • Don’t be a Yugo…Give your clients a lot of reasons to hire you!

8 Steps to Getting Hired More Often


Getting Paid or do better for your clients?

$$$


Getting Paid or do better for your clients?

When is the 1st time you should address

commissions?


Getting Paid or do better for your clients?

When you first present your services!


Getting Paid or do better for your clients?

When should you offer commission discounts?


Getting Paid or do better for your clients?

If you offer no benefit beyond that of your competitors, no differentiation, or no service…Always!


Getting Paid or do better for your clients?

If you:

  • provide great service,

  • are incredibly responsive,

  • solve problems…quickly,

  • help clients achieve business objectives,

  • offer business solutions, not just real estate deals

  • provide honest and creative ideas,

  • really give a damn about their company,

  • and exceed their expectations,

    you should rarely negotiate commissions!


Getting Paid or do better for your clients?

When should you first inform the landlord or seller of your commission requirements?


Getting paid
Getting Paid or do better for your clients?


Getting Paid or do better for your clients?

When should you first inform the landlord or seller of your commission requirements?


Getting paid1
Getting Paid or do better for your clients?

The landlord is a friend (Whah!) I’ve done other deals with the landlord and accepted discounts (Where’s my mommy?),

I play poker with the landlord (Where’s my bottle?), The landlord’s a member of my golf club

(My diaper needs changing!)


Getting Paid or do better for your clients?

Inform the landlord of your commission requirements…

at your first meeting!


Getting paid2
Getting Paid or do better for your clients?

When should you execute a commission agreement?

Before offers are accepted, if not sooner!


Getting Paid or do better for your clients?

Other methods of compensation?

  • % of savings – Tenant Paid

  • Monthly Retainer – Tenant Paid

  • Flat Fee / Lump-Sum – Tenant or Landlord Paid

  • Fee per sq. ft. – Tenant or Landlord Paid

  • Combinations of the above

  • Others?


Getting Paid or do better for your clients?

What are the most important parts of the

Tenant Rep Agreement?


Getting Paid or do better for your clients?

  • Definition of representation

  • Term (length of the agreement)

  • Sole representative

  • Post termination

  • Ability to be fired (terminate with right to cure)

5 Key Parts of the Tenant

Rep Agreement


Getting Paid or do better for your clients?

What are the most critical components

of the

Commission Agreement?


Getting paid3
Getting Paid or do better for your clients?

  • In writing

  • Method of calculation or definitive dollar amount

  • Payment schedule (upon signing, possession, etc.)

  • Not conditioned on tenant default

  • Third party broker clause

  • Future events

6 Most Critical Components of the Commission Agreement


Getting paid4
Getting Paid or do better for your clients?

  • Don’t be quick to offer commission discounts

  • Compete on price, only if you offer no value

  • Don’t be a cry baby … negotiate commissions from strength

  • Execute commission agreements before offers are accepted

4 Steps to Getting Paid more,

More often


Brian netzky sior1
Brian Netzky, SIOR or do better for your clients?

  • Boutique Industrial Tenant Rep firm

  • Industrial users are entitled to expert representation

  • Specialize in clients that lease 100,000sf and up

  • 100% Exclusive Rights to Represent; 100% Commission agreements

  • Earn full fees on renewals

  • Utilize SIOR network to provide ‘Best in Class” service across the U.S.

59


Steve Morris, SIOR or do better for your clients?

  • Active in commercial brokerage since 1975

  • Founded Strategis in 1982

  • Founding partner in GVA Worldwide

  • Provides in-depth, multi-service processes

  • Consulting and transaction experience –office, technology, research, education

  • MBA Program instructor at University of Michigan

  • Teaches real estate finance for CoreNet MCRE Program

  • 2000 Broker of the Year – University of Michigan / Urban Land Institute Real Estate Forum

60


Andrew b zezas sior2
Andrew B. Zezas, SIOR or do better for your clients?

“Success in not free; neither is failure!”

Ray Kroc, Former Chairman and Founder of McDonald’s Corporation

“The best time to plant a tree was twenty years ago…the

second best time is today”

Chinese Proverb

Join the Tenant Rep Specialty Practice Board

908 245 5999 x11

[email protected]

New Jersey


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