Real estate is a complex industry with many different disciplines. The innate structure of the industry demonstrates just how quickly it can become complicated. Even within the commercial space there is a tremendous difference between industrial, retail, and office specialties. The types of properties, client use and lease terms will vary greatly depending on the commercial domain. Between commercial and residential real estate, the disparity is massive, which makes finding the right broker for the job crucial to efficiently and smoothly closing a deal on the right space.
Running the Certification Gauntlet
While residential and commercial real estate may overlap in some areas and begin with the same initial licensing, they are vastly different. An exceptional broker who specializes in one area will often receive additional training via courses and professional development workshops. Certified brokers can choose to become accredited in different areas such as the Accredited Buyer’s Representative (ABR), or earn additional designations such as Certified Commercial Investment Member (CCIM), Certified Negotiation Expert (CNE), Certified Residential Specialist (CRS) or Certified Short Sale Negotiator (CSSN). Becoming a successful broker requires time and dedication, but the most invaluable asset is on-the-job experience.
Discerning Between the Similarities
There are many differences between commercial and residential real estate, but upon closer inspection, they can also be quite similar. Commercial revolves around the purchase, sale or leasing of a property for business objectives. This is typically thought to rely on investment-centric numbers, whereas residential, focusing on the needs of a family, will involve more intangible qualities such as emotion about the property. Of course, anyone who has grown a business from the ground up will understand how much emotion can be involved. In turn, someone making a residential sale or purchase for the sake of an investment will be able to make decisions with a lot less sentiment. Therefore, it’s always important for a broker to understand each client’s innate set of circumstances in order to best guide them through the transaction process.
Staying Current with Trends and Establishing Relevant Connections
Throughout the course of a real estate agent’s career, they will obtain a deep understanding of the current trends within their market sector. For example, knowledge of the commercial market allows a commercial real estate broker to leverage more business terms during a lease negotiation. Another key factor that sets the different disciplines apart are the types of connections built over a career. Relationships that are made in the residential real estate world will be different than those established in the commercial realm. For example, the process of a family moving into a new home will involve outside assistance from appraisers, inspectors, mortgage lenders, residential attorneys and an array of subcontractors. This differs vastly from a company moving into a new office space who will need to be connected with architects, commercial attorneys and contractors, furniture vendors, IT consultants and phone & data brokers. Working with an experienced real estate broker who has built relevant connections in that field can make a big difference in the quality of each process.
Regardless of the classification of the property you’re interested in pursuing, it is important to find a quality broker that knows how to negotiate terms depending on the type of contract that is being written. Real estate is a complex industry and a specialized broker will best suit your needs.
There are never enough hours in the day when you’re a small business owner. Try adding relocating your business to your list, and you’ll really have your head spinning. While important, finding a new office is a daunting task and can soak up drastic amounts of time. Thankfully, there are Chicago Commercial Real Estate professionals who want to help you.
Find a Space
With a sea of options available, how do you narrow it down to the handful of spaces that are perfect for your business? A large part of a broker’s job is to understand the market and what’s available for potential tenants. A commercial real estate professional will be able to identify what your business needs, and find the right space much more efficiently than you could, saving you time and frustration.
Schedule Walkthroughs and Meetings
Scheduling meetings with landlords and space walkthroughs take much more time than you’d think, taking away from the day-to-day of running your business. Commercial brokers will simplify the process by prescreening the space to ensure it’s worth your time to visit. From there, they will work with your schedule to find the best time to tour the space. The added benefit of having a broker on your side during a meeting is their knowledge of the market and fair lease terms, which can provide additional negotiating leverage
Negotiation and Paperwork
Negotiating a commercial real estate lease requires skill and knowledge of what can and can’t be conceded. While an attorney’s role in the lease negotiation process serves to minimize risk, a commercial broker’s role is to minimize cost. Only a season professional, who is keenly aware of the market, will know what to ask for with regard to items such as tenant improvement dollars and rent abatement. Your broker’s intimate knowledge of commercial leases will help ensure you are getting the best possible terms.
Chicago real estate is all about local market knowledge. Working with a professional who is an expert in their discipline can save you an immense amount of time, money and frustration.
The South Loop real estate market has been exploding in the last couple years, but what is the next neighborhood to experience a boom? Perhaps the answer isn’t just one, but several. As businesses keep shifting their focus to downtown, neighborhoods surrounding the popular Loop, will boom: River West, River North, Goose Island, New City, Near West Side and Near South Side.
Get it Before it’s Gone
Large corporations – McDonald’s, Wilson Sporting Goods, Mars – have made the jump to the city, shrinking the amount of available space in the West Loop and other downtown areas. The surrounding neighborhoods mentioned above are at the early stages of popularity, and once they begin to trend, you’ll be glad you secured your spot. As with residential real estate, when you find a space you like you should move on it before someone else does.
The Trending Areas
One of the early signs that Goose Island is entering the early stages of popularity is the announcement Amazon will build its 51,900-square-foot Chicago warehouse there. The Clybourn Corridor is also undergoing a large transformation from its previous life as a booming industrial area. The area’s old Finkl Steel Mill site has plans for redevelopment, pushing the transformation of the Clybourn Corridor into the next phase. Warren Baker, a Chicago developer, already has plans to convert an old warehouse into a new, trendy loft office building, which will create an additional 65,000-square-feet of office space.
With Chicago being such an attractive option for corporations, the large amount of incoming developments will act as an additional lure to more businesses that are looking to move their headquarters closer to their employees.
With new buildings coming online in the coming years across Chicago, the profiles of many neighborhoods are going to change. Goose Island is reaching the beginning of its post-industrial life with a vibrant future planned. Developers have a vision for the man-made island, and they want to turn it into Chicago’s next top tech neighborhood. Properties are being purchased with plans to renovate the old industrial buildings into brand new, hip office spaces. Multiple large developments are already underway, however these large projects will take a few years to complete and fill-up with tenants. With the predicted facelift that Goose Island is slated to receive, there should be no shortage of tenants.
The downtown area is booming, and the effects of its popularity surge are beginning to spread outward. The fluid nature of neighborhoods will continue to cause shifts in popularity, making the coming year an exciting one to watch.