Commercial real estate is a complex yet rewarding industry. Regardless of your role within it, you’ll meet your fair share of challenges.
If you’re a buyer or tenant scoping out commercial properties for sale or lease, you’ll have no shortage of due diligence work to carry out. And if you’re a seller or landlord, you’ll need to stay on top of things like property evaluations, marketing, property management, return on investment, etc.
Simply put, there’s a lot to keep track of. Partnering with a commercial real estate broker can make things a lot easier.
Keep reading to learn more about who these professionals are and what they do!
WHAT A COMMERCIAL REAL ESTATE BROKER IS
A commercial real estate broker is a state-licensed intermediary (essentially a professional “middleman”) who assists with the purchasing, selling, and leasing of business real estate by handling most or all of the associated responsibilities on their client’s behalf.
COMMERCIAL REAL ESTATE BROKER RESPONSIBILITIES
Though their goals are pretty straightforward—connecting potential buyers, sellers, tenants, and landlords—commercial real estate brokers’ responsibilities vary significantly depending on which party of the transaction they’re representing.
ACQUISITIONS (HELPING CLIENTS BUY)
Commercial real estate brokers that specialize in acquisitions handle the “buy side” of property sales. Typically, the broker will start by meeting with the investor (the purchaser) to gain a better understanding of what they’re looking for in an investment property.
They’ll use these findings to start determining which commercial buildings could potentially fill their client’s needs as they relate to square footage, classification, and potential tenant businesses.
Even after helping their client find an ideal property, the broker’s work will continue. They’ll coordinate property inspections, negotiate contracts, hire architects and engineers, and carry out other crucial tasks all the way through closing.
DISPOSITIONS (HELPING CLIENTS SELL)
Brokers who handle dispositions, on the other hand, work on the “sell side” of business real estate transactions. The majority of their responsibilities are centered around finding the optimal asking price for their client’s property, then ensuring it gets sold accordingly.
Doing this effectively involves carrying out extensive market research and engaging in a wide variety of marketing and/or networking activities. For example, after a broker enters a listing agreement with their client, they’ll create an offering memorandum and begin tapping into their industry network to seek out potentially interested buyers.
Like their acquisition-focused counterparts, these brokers will also guide their clients throughout the closing portion of the sale, often handling contract negotiations and other final due diligence items.
WORKING FOR LANDLORDS
Landlords who have vacant commercial real estate for lease will often hire a commercial real estate broker to help them find ideal tenants.
In this type of transaction, the broker will help prepare and market the property, attract and vet potential tenants, determine which lease type will be most effective, and then handle the subsequent leasing contract negotiations on behalf of the client.
WORKING FOR TENANTS
When a tenant is searching for a commercial property to house their business in, they may choose to partner with a commercial real estate broker. After the broker gets a good understanding of the client’s specific needs—square footage, visibility, parking availability, nearby amenities, foot traffic, etc.—they’ll go about finding suitable properties.
Typically, the broker will also handle property inspections and leasing negotiations on their client’s behalf, allowing them to focus their attention on maintaining their bottom line.
HOW COMMERCIAL REAL ESTATE BROKERS ARE COMPENSATED
Commercial real estate brokers work on commission. Their compensation rate is usually based on the sales price or gross lease amount associated with their client’s property, frequently falling between 4%-6% depending on negotiations.
When the commercial property seller (or landlord) and buyer (or tenant) are both represented by brokers, the commission amount typically gets split down the middle.
FIND COMMERCIAL REAL ESTATE IN IOWA
If you’re a business owner looking to find a commercial property for lease in Iowa, or an investor seeking out a commercial property for sale in Iowa, you should begin your search in the City of Altoona!
Located minutes east of Des Moines—and with over 4 million visitors and $677 million in taxable retail sales in 2021—the City of Altoona is a leader in economic development.
We’re equipped with the leaders, economic tools, utilities, and infrastructure needed to foster long-term development and mutually beneficial real estate partnerships. Plus, Altoona commercial real estate is often supported by exciting incentives, grants, and tax credits.