Magazine article Journal of Property Management

Are You out of Commission? Am I out of My Mind? Is It Time for Office Building Property Managers to Earn Office Leasing Commissions?

Magazine article Journal of Property Management

Are You out of Commission? Am I out of My Mind? Is It Time for Office Building Property Managers to Earn Office Leasing Commissions?

Article excerpt

I write this article realizing I may be run out of town by my peers, banned from ever again practicing commercial real estate and forced to change my identity. I am not fazed one bit. My colleagues know I speak my mind, am passionate in my beliefs and will take risks in navigating and expressing my opinions on subjects that others will turn away from.

There is no "I" my TEAM

My newest campaign is simple. Office building property managers should share in leasing commissions. There, I said it. I hear the boos and hisses from the landlord leasing reps already. And here come the rebuttals. "Of course that is Mendel's position, he has his CPM and he's a property manager. He's biased and self serving." Wrong. I am a 25-year veteran broker having negotiated over 1,000 tenant and landlord rep transactions along with managing several million square feet, of office property spanning many types of buildings. So I speak from a unique and experienced perspective.

Property managers and leasing reps ideally should work together as a team. And as we all know, there is no "I" in "TEAM." Teams win and lose together--even if winning or losing is the result of specific individuals. Let's take any football team, for instance. One week, the running back in a football game scores on a last-minute 35-yard touchdown run; the next game, the quarterback wins the game on amazing passing and scrambling; and, in game three, that same team loses because the kicker missed three very makeable field goals.

The point is that in the sports section standings, the record shows whether your team wins or loses, not any given individual.

In reality, the running back, the quarterback and the field goal kicker did not really lose or win the game for their team. The outcome was determined by a culmination of both good and bad plays carried out by many team members throughout the game who were responsible for certain assignments and responsibilities. The sum of those efforts results in a win or a loss. A great play in the first quarter is just important as the game-ending touchdown run by the fullback. And so it goes with a tenant renewal in an office lease. The tenant renewing or not is dependent on both the property manager and the leasing agent executing their assignments effectively. One can't win (consummate a renewal) without the other's contribution.

Get in the Leasing Game

So let's leave the football game and go watch a leasing game. The game kicks off with a 10,000 sq. ft. tenant with a lease up for a renewal. In the opening play, the tenant runs to the property manager to ask if the space is still in play and if the company wants to renew. The property manager passes the ball to the landlord leasing rep who introduces himself to the tenant. They both huddle to discuss the tenant's needs and the landlord rep communicates what plays the owner can provide the tenant--be it tenant improvements, space reconfiguration, rent concessions or flexible terms and options. Typically, during these negotiations, not much time comes off the clock since the tenant is basically pleased with their home stadium and would prefer to keep running the business in their home field. Before you know it, the lease renewal is signed and the game is quickly over. The onlookers barely had time to go to the concessions and enjoy the leasing game. …

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