Going Commercial

by Chicago Agent

by Daniel Sullivan

My first-ever residential real estate client was a friend from college. While riding around the city in search of his first condo, he told me a story that stuck with me. When his father arrived to the U.S. from Ireland in 1951, hard times and the promise of citizenship led him and his friends to an army recruitment line.

After completing the required paperwork an officer asked them all one question: “Do any of you men have experience repairing airplanes?”

Having never picked up a wrench but simultaneously recognizing it was likely safer to call an airplane hanger “home” than a trench, they all answered confidently “Yes, yes of course we do!”

Certain they were every bit as skilled as they claimed, the officer directed the men aboard a bus with the other mechanics, and their lives changed forever.

They soon befriended the more skilled repairmen while downplaying what they didn’t know about airplane maintenance (which was everything). Gradually, they became proficient mechanics; a skill that would help them build successful lives after the war.

It’s a stretch to equate the real estate industry to the armed services, but as the market started to sink, a lot of agents were out of options and left wondering where to turn. As a residential broker, you couldn’t expect to survive by continuing to conduct your business conventionally.

Many agents began specializing in foreclosures or short sales, some did BPOs and everyone started to do rentals. Similar to my friend’s father, I began answering “yes” to virtually any opportunity regardless of whether or not I had the experience.

-“You want a garage for an auto repair shop? Easy. I’ll find you one.”

-“Always wanted to own a farm? How many tillable acres do you need?”

-“Your housing association has 3,000 square feet in a basement you want to try and lease? No problem.”

Many of these prospects were dead ends, but many weren’t. At the very least, each situation usually resulted in a referral or a valuable relationship. Some were just worth it for the entertainment value alone.

My first commercial deals were smooth, thanks in part to the eagerness of so many landlords to secure tenants. Negotiating a deal isn’t that hard when you have a landlord throwing incentives at you.

If a difficult transaction ever arose, it was easy to get guidance from my coworkers. Since I’m part of a brokerage where the average agent has 10 years of experience, it was common for someone at Conlon to have a history with the particular building, broker or landlord I was dealing with, and sometimes all three.

Ideally, I would love to bookend this story with how I recently sold my friend’s father his own airplane hanger, but sadly I can’t. The best I can offer is that it has never been more important to see the big picture. Great things arise during hard times, and in the case of real estate, the market is triggering an evolution of today’s agent.

Those agents staying in the business are becoming smarter and obtaining experience they wouldn’t otherwise, which will only benefit everyone in the end.

Tips to Selling Commercial

  • Ask what costs are bundled into the price per square foot of a space. Additional taxes or utilities can determine if a space works for your client.
  • Build relationships with brokers, property owners and bankers. It’s always valuable to know about vacancies before they hit the market.
  • Prepare your clients that a credit check and two years of tax returns are commonly requested when leasing.
  • Be certain of the zoning for a particular property and what existing restrictions might affect you.
  • Understand what build-out costs the landlord is willing to cover. Construction is often necessary to customize a space for the business needs of a tenant.
  • Try to always conduct transactions with those that are legitimate and have solid reputations.

Daniel Sullivan is an agent with Conlon: A Real Estate Company. Sullivan focuses on both commercial and residential sales. He can be reached at dsullivan@conlonrealestate.com.

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