Location, Location, Location…….it’s a phrase used by industry experts and fools alike. While it may be an overused mantra, it has never been more true than in the restaurant business today. Make no mistake about it, the restaurant category in virtually every market is crowded with new concepts appearing almost daily. The only segment that seems to be more congested is the real estate brokerage category. Here too, it seems that there is a new brokerage popping up every day. From an industry standpoint, this is certainly positive growth but unfortunately, from a practical side, it can be troublesome. With all of this sudden growth comes inexperience, undisciplined amateurs and some that, dare I say it, might be less than honest. At the very least, many are unsophisticated in the industry’s ‘unwritten rules’, the common sense guideline. Granted, it may be a reflection of just how good the brokerage/consulting category has been in the past, making the site selection process seem so easy and seamless. After all, what could be easier than putting a willing tenant together with a willing landlord, no fuss, no muss……..and get paid for it too? Make a few calls, arrange some meetings and collect a check. No investment, no overhead, no inventory, sounds like paradise.
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Over the past decade, the retail broker/consultant category has attracted quite a number of ‘Location, Location, Location Experts’. Sadly, many are far from true experts and unfortunately, in too many instances, it is the tenant that is paying for the lack of expertise.
Now don’t mistake my comments as being a ‘wide brush’ condemnation of the brokerage/consulting category. Far from it! The site selection process has become extremely specialized today and just as I wouldn’t recommend that you operate on yourself, I would strongly recommend that for retail site selection, you hire a professional, one that has credentials and references. Gone are the days when site selection was decided by questions like, “How much?” and “Are there leaseholds?” Due to over building of retail properties, institutional ownerships and the competition for the consumer dollar in every category, be it retail or restaurants, the ‘location’ has become more important than ever before.
The site search process now requires the skill of an acrobat, along with the patience of Job and the wisdom of Solomon. The tenant needs to have a knowledgeable and capable representative in his corner. And the onus is on the tenant to find and qualify that ‘expert’. There are plenty out there and in the crowded category, ‘buyer beware’ has become the watch word. Many have learned through bitter experience that not all brokers are equal, there are great ones and there are the masters of………….bull poop. Even with the industry’s unusual remuneration practices, the client must do his/her homework. There are millions of dollars at stake here. Reputations and livelihoods are on the line, certainly not something you want to put into the hands of a fast-talking amateur. The real experts aren’t always the biggest companies either. Sometimes they can be the one-person specialty shop. Regardless of the size or specialty, they should come with a track record and they should be willing to present that history along with references. And it’s vitally important that you check out those previous clients to insure that you are picking the right expert. After all, you wouldn’t hire wait-staff without checking them out. Why would you retain real estate help without looking at more than a brochure and the kind of car he/she drives. Check them out and if something doesn’t feel right, move on.
When you do find that ‘real expert’, treat them like a member of the team. They must be aware of any business skeletons lurking in your closet, any previous real estate help that has been on board and your short and long term plans. And most of all, you must tell them what you expect from them. As a member of the team, open communications is essential. Of course, the good broker/consultant will likely present you with a ‘mandate agreement’ or some form of contract that spells out terms and responsibilities. In some cases, landlords will require some assurances that the broker/consultant is actually working on your behalf but in most instances, it really is just a show of good faith. After all, the real experts will tell you that not all clients are honorable too………………WP