What You Don't Know CAN Hurt You.

Real Estate Broker/Owner with Criado Realty 0548772

Customer Service is King, we all know that. Or do we?  I find it interesting that some real estate agents just don't get it. I think it comes back to being in tune with people's needs, and willingness to not make your agenda the barrier for information flow.

How the Story Begins

Several months ago a small business asked me to help them find a new location. They expressed interest in staying right where they are if and only if the owners would provide better customer service. If you aren't aware of how commercial leasing works, I should start with.... Landlords often take advantage of small businesses because the Tenant doesn't understand what is in the lease or what can be negotiated.

In this case, the building had a major Tenant exit and was replaced with a school. That means lots of renovation and relocation within the building on the part of smaller Tenants. My client was relocated into spaces that legally met the definition of "similar space" - but wasn't. Rather than having prominent space off the elevators, and one contiguous, efficient office layout, they were moved into a back corner, with odd shaped spaces, and 25% of their space was across the hall. This has been an ongoing business interruption situation. 

The Hearing Impaired

After touring several spaces and being on the very edge of vacating their existing space, the owners had their leasing representative contact the Tenant about renewing their lease. I stepped in and announced my representation stating their needs. The Leasing Rep's response was.... "We won't negotiate the rate. I'm not here to discuss their problems or rates, I just want to show them how we can make their space more efficient."  I tried to explain that the owners need to negotiate rates and consider expanding their space into the vacant adjacent suite, with some major suite improvements for my client to consider staying since other property owners already offered them something better. She blew me off.  The Tenant told me not to even negotiate any further with them.

Spies Like Us

Throughout this series of meetings The Property Manager noticed the Leasing Rep's behavior.  When the Owner's asked what's the roadblock? These are great Tenants!  She replied, it's our Leasing Rep. The Owner's asked me to email a summary of what my perspective is on all this.  I asked the PM why? She said, because the Leasing Rep is on notice. I should mention that the Leasing Rep I'm speaking of has 5 years seniority over me but has less than half the education and none of the listening skills. She has a nice title, Vice President, but in my world that doesn't mean [fill in the blank]. 

Lost & Found

Just because you are a "Vice President" - sales is sales and if you can't get a great Tenant to renew then you're gone. She lost the opportunity because she allowed her personal agenda - new person to the team gets good leasing rates - to get in the way of being able to listen- and lost everything in the end.  The Tenant wanted R*E*S*P*E*C*T so they found it in a property across the street, because I listened.

Posted by
Cathy Criado President & Founder
Published Author
Your Real Estate Consultant!
999 E Basse Rd. #180-425, ​San Antonio, TX  78209​
​Direct:  (210) 560-1891
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Anna Banana Kruchten CRB, CRS, Broker
Phoenix Property Shoppe - Phoenix, AZ
Arizona's Top Banana of Real Estate!

Cathy I've run into this myself and it shocked me that the leasing agent wouldn't negotiate a lower rate with me since it was an over 50% vacant office complex after the downtown. Can you say....adios fast enough some days? YES!

Jul 16, 2012 10:49 AM #1
Debbie Reynolds
Platinum Properties - Clarksville, TN
Your Dedicated Clarksville TN Real Estate Agent

Cathy, That just doesn't seem to be right. I'm sure it happens often but it shouldn't.

Jul 16, 2012 10:57 AM #2
Cathy Criado
Criado Realty - San Antonio, TX
Making Real Estate Profitable

Hey Anna - there is actually a complicated algorithm involved and it also has to do with Net Operating Income. What we were asking for was not all that much, but the crux of the matter was tone and inflexibility. Very sadly, early on I called on the vacant space next door and was quoted about 5% less than what they were willing to concede. That was a real slap in the face.

Debbie - it's because the LL has to be able to move people around when the floorplates are small - a high rise building. It does happen all the time and it does cause some businesses to move. It costs the business thousands and thousands to relocate due to phone and internet set ups. But if the costs can be recovered in rent abatement then it might be worth the effort.

Ladies thanks for stopping by!

Jul 16, 2012 11:06 AM #3
Paula McDonald
Magnolia Realty ~ Granbury - Granbury, TX
Magnolia Realty ~ Granbury, TX 936-203-0279

I too work in commercial real estate and it is a different ballgame for sure.  I have seen more unethical situations and behavior in that arena than I can shake a stick at.  It is sad.  I however, continue to forge ahead and know that my clients are getting the best representation.  There are sharks out there.

Jul 16, 2012 09:23 PM #4
Mark Delgado
houses for rent, Solano County & Glen Cove - Benicia, CA
Benicia and Vallejo, Property Management, rental h
I believe you all day long. Some people really seem to think that they can make their own rules and that the other party should just "take it.". Good job on your part for helping the little guy.
Jul 16, 2012 09:51 PM #5
Scott Godzyk
Godzyk Real Estate Services - Manchester, NH
One of Manchester NH's Leading Agents

Good Morning Cathy, Listening is the number 1 skill in sales. Most agents do not and that affects their ability to make the client happy. Great job on your lease negiotiations.  Have a great Tuesday.

Jul 16, 2012 10:22 PM #6
Brenda Mayette
Miranda Real Estate Group, Inc. - Glenville, NY
Getting results w/ knowledge & know-how!

Hi Cathy! I love agents who refuse to listen to their client(s)... Puts the bar so low for those of us who "get it".  Seriously though, I believe that actively listening to our clients is the #1 thing that impacts our income. Thanks for the reminder!

Jul 16, 2012 10:30 PM #7
Sheila Anderson
Referral Group Incorporated - East Brunswick, NJ
The Real Estate Whisperer Who Listens 732-715-1133

Good morning Kathy. This is a great title and the blog did not disappoint. Very good points and very well written.

Jul 16, 2012 10:58 PM #8
Dick Greenberg
New Paradigm Partners LLC - Fort Collins, CO
Northern Colorado Residential Real Estate

Hi Cathy- Commercial is a different world - not better or worse, just different, with it's own set of challenges and a bunch of sketchy practitioners who have their own little set of tricks. I think can be a bit more cutthroat and a bit less ethical, if only because it's a bit less transparent. And there is a lot less warm fuzzies. I only do commercial for existing clients anymore, and I have to say I don't miss it much.

Jul 17, 2012 12:39 AM #9
Kwee Huset
Kwee Huset Realty - Venice, FL
Venice Florida Homes For Sale

Hi Cathy, in our area normally you have to register the tenant or buyer (commercial property) with the listing agent to protect your commission before any negotiation begin. Congratulations on your FEATURED post.

Jul 17, 2012 11:44 AM #10
Steven Cook
No Longer Processing Mortgages. - Tacoma, WA

Cathy -- have some business associates who are working through lease problems at this time -- building/land owner is forcing them out before lease is up - so can tear down and rebuild.  Unfortunately, new rates will not allow same "mom & pop" stores to come back in after construction  - and owner doesn't want to liquidate broken lease.

Jul 18, 2012 02:50 AM #11
Cathy Criado
Criado Realty - San Antonio, TX
Making Real Estate Profitable

Steven - that's a no brainer. Have their attorney review the lease and confirm the landlord is in default.  There could be some financial compensation for this situation. As to the new project and new rates, well, I'll take the landlord's side on that because ultimately real estate is an investment and if the owners aren't using the land in its highest and best form, so beit. Sorry, but business is business. Its one thing if they are not abiding by thier lease terms, its another to allow the investor to reap their greatest rewards, assuming it is within fair market value.  Remember, it's not a charity project, it's a multi-million dollar investment in most cases.

The rates I referred to in my scenario are being quoted to new Tenants. The owners were holding out for higher rates because they thought the Tenants wouldn't walk, they will and are.

Jul 18, 2012 04:37 AM #12
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Cathy Criado

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