Commercial Investment Real Estate

NOV-DEC 2012

Commercial Investment Real Estate is the magazine of the CCIM Institute, the leading provider of commercial real estate education. CIRE covers market trends, current developments, and business strategies within the commercial real estate field.

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INVESTMENTANALYSIS Negotiate to Win Hard work is the secret to closing a deal. by John Culbertson i 16 November | December | 2012 I used to think that I was a good negotiator. I thought that I had been born with an instinctive knack for negotiation, imbued with gifts that made me capable of representing my clients better than anyone else out there. As it turns out, I was wrong. What I dis- covered along the way was that great nego- tiations require nothing less than donkey- work. Embracing the drudgery involved is the best thing that any truly committed negotiator can do. My experience detailed below sums up the critical importance of putting your nose to the grindstone when it comes to real estate building entering foreclosure. T e landlord speculated that brokers were resisting bring- ing new clients into the park. Because we were willing to do the neces- sary legwork, our team succeeded in leasing the space to the Red Cross. T e donkey-work gave us a concrete understanding of the deci- sion-making process of both sides. T rough this, we were able to map out the landlord's range of acceptable terms, the tenant's specifi c needs, and all of the alternatives open to us. It wasn't a quick or simple process. Negotia- tions lasted almost 12 months. But in the end, we were able to serve up a win-win solution that assured the tenant a fair price and also enabled the property owner to re-establish a momentum that eventually led to leasing 180,000 sf and stabilizing the business park. negotiation. In all likelihood, you've experi- enced something similar. Since commercial real estate professionals are involved in nego- tiations at every turn, why not learn how to do it the right way? The Deal Recently I represented a landlord who was anxious to lease 62,000 square feet of offi ce space to the American Red Cross — no small coup. T is was during a very critical time for the landlord's business park. Having recently lost three high-profi le tenants, the complex was eff ectively 72 percent vacant, with one A Learning Experience We didn't do everything right and not everything went smoothly. T ere was an excessive amount of time spent responding to a 96-question request for proposal. In addition, a lot of time was wasted running around collecting information that turned out to be unimportant. But we learned from our mistakes. If I had a chance to turn back the clock and cast a to-do list into my unknowing hands, this is what I'd include: • Take copious notes from the beginning. You'll never regret taking too many notes. Commercial Investment Real Estate Gina Sanders/Veer

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