As a commercial real estate broker specializing in the sale of shopping centers, I value the relationships that I have built with retail leasing agents over the years. In fact, my early mentors were mostly leasing agents and I have shaped much of the style I use in selling shopping centers with what I have learned from retail leasing professionals. This is why it bothers me when I witness missed opportunities, such as when a property owner decides to sell a shopping center and the leasing agent does not get included in the sales process.
Leasing Professionals; The Unsung Hero
Leasing professionals are at forefront of value creation, from assembling the right mix of major tenants for the shopping center to persistently finding the right tenant for that last, hard to lease, space. The leasing agent is the unsung hero that grinds out the lease negotiations to stabilize the property’s income stream however, when the landlord decides to sell the Property the unsung hero often gets overlooked from participating in the sale. This prohibits leasing professionals from earning a well-deserved fee from the sales commissions.
In most instances, property owners value the leasing professional for a reason, and it is tough to be an effective leasing person and handle sales transactions. This is where collaboration with Investment Professionals, like myself, will yield leasing agents well-deserved dividends from their labor. If this sounds self-serving, it is! I want to team up with leasing agents to help them earn a commission from the projects they leased. I am an investment sale professional with a 23-year record of selling shopping centers. That is all I do! I have an experienced team and collectively we underwrite position, distribute and effectively negotiate a shopping center sale, but I always need the local trade area knowledge and first-hand experience with the subject shopping center and its leases. This is where teaming up to drive value to the overall transaction will be the most effective.
Partnering on RFPs
In one of my most successful partnering scenarios, I collaborated with a leasing professional from another large brokerage company. They wanted to collaborate on a response to a request for a proposal to sell two shopping centers across from one another. The ownership was a New York-based institutional fund adviser whose clients had owned the property for close to 20 years. My partner, on the transaction, had been leasing the property for close to 10 years. He chose to reach out to me because he did not have anyone at his company with the proper experience to sell a shopping center. Even though it is unconventional to collaborate with different companies in the sale of a project, there was a compelling reason why it made sense for us to team up for this assignment.
Our team had recently completed the sale of similar projects and the leasing agent had a long history of leasing the property with a strong familiarity in the trade area. He had already completed leasing the remaining available spaces to stabilize the income stream, and felt that there was still more value when some of the short-term leases expired and the spaces were either r-leased or renewed. This presented a valuable story to potential investors in order to maximize value for the property.
Results
Our team collaborated on the proposal presentation and beat out two other sales teams for the business, the combined team of leasing and investment experts was the difference maker.
During the marketing process our collective team was able to handle several objections from investors who questioned our leasing assumptions. We were able to demonstrate intimate familiarity with the trade area and highlight appropriate comparable lease transactions. We also proved strong tenant demand by producing LOI’s from perspective tenants.
We ended up completing two transactions, one tailored for a strategic ownership of the remaining shop spaces to the main grocer tenant that already owned their parcel and the second to a value seeking syndicator who had investors in an exchange. If the leasing agent who had worked for almost 10 years to add value to the property would not have reached out to our team they would have missed the opportunity for a sale and the ownership would not have yielded such positive results.
Opportunities to form partnerships between investment and leasing agents come in many shapes and forms. They may not always be appropriate but if you are an investment agent and the project requires the hands-on knowledge of the leasing agent or if you are a leasing agent and the project requires the technical experience of an investment agent, the combination of experiences will produce outstanding results.
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