In commercial RE, can we have multiple agents looking for deals?

Question

Hello, everyone,

Just curious: in commercial RE, is it common to have multiple agents looking for deals at the same time? As a residential RE agent, I think it's not common because all the agents use MLS to access deals. Off-market deals are very rare. However, I heard in commercial, most are pocket listing and sold off-market. Most listings in loopnet or costar are not good deals as it's already passed by many investors.

My family wants to invest some commercial properties. So I plan to write an email to all the listing agents in our area and ask them to add me to their buyer list. Do you think it's a good strategy to reach top commercial agents? What if two agents bring me the same deal that I am interested? In the email, should I disclose that I am working with all the realtors as buyer? is it offended? In residential, I won't work with such clients, but not sure commercial world....

Any comment is appreciated.

Jon Huber · Answer

@Amy L. As a realtor myself, I think it is fine. If you do not have an exclusive agreement, then your loyalty is to who brings you the deal. If two agents bring you the same deal, you go with the first one. I don't think this needs to be explicitly disclosed, as it should be assumed. If you did have loyalty to only one agent, and someone else brings you a deal, would you not take the deal? Of course not.

Joel Owens · Answer

Amy you could but they do not know you from anything. Brokers have relationships with other brokers that go years deep. When a buyers broker heavily vets any buyer they work with the sellers on the other end and the listing broker knows they can count on the deal closing. Listing broker also generally do not like working with buyers as they know they take a lot of education and hand holding to get them to purchase if an individual versus a professional  buyer like a fund, REIT, insurance company, etc. that has done it over and over and over.

It also comes down to time on your hands. My clients that are worth multi millions do not have time to find deals. They are running corporations or are at the pinnacle of their chosen field. They have me do those things day in and day out.

I have an office assistant that does nothing but make calls all day. We also do mailers to find sellers directly. A lot depends on if your criteria is realistic or not. Some buyers have no clue what is available for a particular asset class in a particular cycle. They are wanting pricing of 3 years ago that doesn't exist today. I would check your strategy and see if it is even possible today.

What criteria are you trying to hit??

Amy L. · Answer

Thanks everyone for the response. I did consider find a buyer agent and I don't mind working with one agent as long as he can bring me the property that meet our cirteria. However, if the buyer agent just call other brokers and ask for off-market deals, why can't I contact them myself as a direct buyer?

I search commercial related discussions in this forum. I kind of got the impression that listing agent will first contact their direct buyer list (they can earn double commission that way). If nobody is interested, they will contact other brokers. If still no interest, they will put on costar/loopnet. Is that true?

I also searched deal makers in costar, it seems most time the listing agent also works as buyer agent. That's why I was thinking maybe I need to contact all the listing agents and let them know I am a serious buyer.

Mark Creason · Answer

Amy,

I occasionally send out an email blast to my list of 3000+ commercial agents.  I work with 1031 buyers who are sometimes in a hurry to find an exchange property, so I will send out a request for what they are looking for.  I will routinely get dozens of properties to work through.  Rarely does one of these properties work.  The fact that lots of agents are working on the deal does not mean you will find a quality property.  I would strongly recommend working with a competent real estate agent who specialize in the property type you are looking for.

Mark

Matthew Vitlin · Answer

My brief experience with commercial real estate has been that there is a broker looking for buyers and a broker looking for a seller.  My family has a commercial building and we have had the same broker finding tenants there for years and years, and he normally finds tenants through other brokers that have clients looking for space.  I would echo @Joel Owens in that having whoever find you a deal might seem to give you a wider net, but most brokers work harder for their loyal clients.

Joel Owens · Answer

Hi Amy,

You can do that but do not expect a commercial broker/agent to give you much time. I have my clients that are loyal to me and I help them find what they are looking for. I also analyze an investment to see if it makes sense for them or not. Residential agents generally do not know how to evaluate commercial properties costing in the millions of dollars or more.

If someone contacts me and says they are looking for XX but working with many other agents I will get around to them ONLY after my direct clients are taken care of.  If someone is not committing to a broker/ agent for a relationship then certainly a buyer cannot expect that effort in return.

If you have a broker you work with and simple they are not getting it done after committing to a relationship that is different. If you work with multiple agents and then they are calling sellers with the same buyer or listing brokers then it makes the buyer look flaky and unstable. Works the same with commercial lenders getting the same property for pre-screen by different mortgage brokers. Nobody has control of the buyer for directing them as they are all over the place so lenders and seller do not want to do business with them. I believe you get further with high intensity focus.

You can get on the list of a lot of commercial listing companies but finding a property is just one step. Knowing how to evaluate a property when the listing broker is going to side with their client is a totally different ball game.

In commercial RE, can we have multiple agents looking for deals?

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