Why Your CRE Agent Should Be a Specialist in Your Asset Class
When it comes to commercial real estate, experience matters—but relevant experience matters even more.
You should be looking to HIRE the broker that does your deal every day, not the broker who does every type of deal.
After all, if you had an issue with your knees or heart, would you go to a family specialist that’s been a doctor for 25 years, or an orthopedic or heart specialist that’s been doing it for 15 years?
A commercial real estate owner selling an industrial building, leasing medical office space, or acquiring a retail investment should ask an important question before hiring an agent:
“How much of your business is actually focused on properties like mine?”
Commercial real estate is not one market. Office, industrial, retail, multifamily, medical office, hospitality, and investment properties each have their own terminology, buyers, tenants, valuation metrics, financing considerations, market cycles, and negotiating strategies.
That is why hiring an agent who specializes in your particular asset class can provide a significant competitive advantage.
Specialization Creates Better Market Knowledge
A specialist is immersed in a particular segment of the market every day.
An industrial specialist understands tenant demand, clear heights, loading, truck access, yard requirements, distribution trends, manufacturing uses, power requirements, and logistics.
A retail specialist understands traffic counts, co-tenancy, tenant sales, demographics, visibility, parking, signage, and tenant-credit considerations.
An office specialist may focus on tenant improvement allowances, free rent, lease structures, sublease competition, building amenities, and changing workplace requirements.
This depth of knowledge allows the agent to identify opportunities and challenges that a generalist may overlook.
Specialists Know the Right Buyers and Tenants
One of the most important things a CRE agent brings to a transaction is access to relationships.
But not all relationships are equally valuable.
An agent who regularly handles industrial properties is likely to have relationships with industrial users, investors, developers, owner-users, landlords, and other brokers active in that market.
Likewise, a retail specialist may know which QSR, medical, grocery, service, or entertainment tenants are actively expanding—and which ones are unlikely to consider the property.
The goal isn't simply to put a property on the market. The goal is to put it in front of the right people.
Specialists Understand How Your Property Is Valued
Different asset classes require different approaches to valuation.
A multifamily property may be heavily influenced by rent growth, operating expenses, unit mix, and comparable sales.
An industrial property may be driven by rental rates, tenant credit, WALT, functional characteristics, replacement cost, and supply constraints.
A retail property may be particularly dependent on tenant quality, lease term, sales performance, location, traffic, visibility, and surrounding demographics.
A specialist understands which metrics sophisticated buyers and investors will focus on—and can position the property accordingly.
They Know What Buyers and Tenants Are Really Asking
Experienced specialists often know what questions will come before they are asked.
For example:
Is the rent above or below market?
How much tenant improvement is required?
How much will a landlord typically contribute to tenant improvements?
Is the current tenant credit strong enough?
What is the remaining lease term?
What are realistic renewal probabilities?
How much capital expenditure is coming?
Is the property functionally obsolete?
How competitive is the surrounding inventory?
What alternative properties are currently available?
What does the property's risk profile justify in terms of pricing?
Being prepared for these questions can prevent surprises later in the transaction.
Specialization Can Improve Negotiating Leverage
Negotiation is another area where specialization matters.
A specialist knows what is considered normal—and what isn't.
They understand typical concessions, market rents, cap rates, lease structures, due diligence issues, financing concerns, and buyer expectations within their asset class.
That knowledge can help a client distinguish between a legitimate market request and an attempt to gain an unnecessary concession. It can also create a stronger offer for their client without unrealistic expectations or requests, saving both time and money.
Information creates leverage.
The more specialized information an agent has, the better equipped that agent is to negotiate from a position of knowledge.
Specialists Can Better Identify Problems Before They Become Deal Killers
Every transaction has potential obstacles.
A specialist is more likely to recognize them early.
For example, an industrial specialist may identify a loading or zoning issue before marketing begins.
A retail specialist may recognize that a proposed tenant's use creates a parking or co-tenancy problem.
An office specialist may identify that a property's outdated infrastructure will make tenant negotiations more difficult.
Identifying these issues early gives the owner an opportunity to address them before they negatively affect the transaction.
Specialization Doesn't Mean Tunnel Vision
Hiring a specialist does not mean ignoring the broader market.
In fact, a good specialist should understand how their asset class interacts with the rest of the CRE market.
Interest rates affect every asset class. Capital availability affects valuations. Employment trends affect office and industrial demand. Consumer spending affects retail. Construction costs influence replacement values and new supply.
The difference is that a specialist understands these broader forces through the lens of the client's specific property type.
The Right Questions to Ask a CRE Broker
When interviewing a CRE agent, don't simply ask:
“How many years have you been in commercial real estate?”
Also ask:
What percentage of your business is in my asset class?
How many properties like mine have you sold or leased?
Who are the primary buyers or tenants for this type of property?
What are the current neighborhood market rents?
What are the most important valuation metrics for my property?
What competing properties am I up against?
What are the biggest challenges you see with my property?
What is your marketing strategy for reaching the right audience?
The answers can tell you much more about an agent's suitability than years in the business alone.
Experience Is Good. Relevant Experience Is Better.
Commercial real estate transactions are too important to select an agent based solely on familiarity, name recognition, or the fact that they “do commercial real estate.”
You want an advisor who understands your property, your market, your competition, and your likely buyer or tenant.
The best CRE agent isn't necessarily the agent who handles everything.
It may be the agent who knows your particular corner of commercial real estate better than almost anyone else.
When millions of dollars—or years of lease income—are at stake, specialization isn't a luxury.
It can be the difference between simply completing a transaction and maximizing the outcome.
Looking for a Specialist in Your Asset Class?
If you’re considering a CRE transaction and looking for a specialist in your asset class, reach out to us at info@cbicommercial.com. We service all asset classes, with specialists in most CRE assets, as well as local neighborhood knowledge.