A CONSULTANT FOR MORE THAN COMMERCIAL PROPERTY

Our company is very much specialised in the field of commercial property. It is a very complex area that requires a wealth of proficiency and industry knowledge, where the property consultant needs to provide a high level of expertise and skilled consulting services. Ultimately, the property business is a very personal interaction in which trust is essential.

We know all the ropes. Take advantage of the more than 20 years of experience of our managing partner, who will be delighted to provide discreet advice.

Furthermore, we want to give everyone who may not be quite so familiar with the field of property a little more security. This has led to the creation of the Property Manual – 10 things that you should look for when working with your property consultant. And although we specialise in commercial property, there are some things in there that are transferable to the field of private properties.

We hope you enjoy reading our Master tips and find them useful.

You should make sure that your property consultant really does specialise in commercial property. If your chosen broker is to provide you with good, comprehensive advice, they have to know their field like the back of their hand and know when which properties will be coming onto the market or up for rent etc. In order to provide this service, your consultant must have and maintain excellent contacts in investment companies, property developers, architects etc. – and will have absolutely no time to spend on private property products, which require completely different contacts and a significantly different approach to consulting services.

The Master tip:
don’t be played for a fool and look for a property partner with the right specialisation.

You receive five offers from five different brokers and find that it’s difficult to compare fees. One talks about basic rent, another about gross rent, yet another about the net rent; one requires 2.5 months’ gross rent as commission, another three net months’ rent – and you find yourself at a disadvantage. You also have the uneasy feeling that there’s a nasty surprise waiting for you somewhere in this tangle of terms – one which you could certainly do without.

The Master tip:
explicitly ask for the exact terms, whether they bill by gross or net rent or whether utilities are included or not. And whether granting an option to extend the contract will cost you additional money, and how the rental of additional space during the agreed lease term will be handled. You also need to pay attention if your broker’s terms depend on the length of the leases. This is not unusual – but you should make sure that all terms and payment conditions are set out clearly from the start.

The broker you commission will of course be remunerated – yet by whom they are paid is subject to negotiation. If demand for property exceeds the supply, the given rule is that the person seeking to rent pays the commission. If there are more properties on the market than there are customers – as is the current trend – then it’s becoming more prevalent that the landlord or seller pays the broker’s fees themselves. A split is also conceivable where tenant and landlord, or seller and buyer, share the commission costs.

The Master tip:
clarify the issue of commission when hiring the broker and also during contract negotiations. A broker who demands a full commission fee from both parties is on no account playing fair.

Many brokers offer the same properties because landlords or sellers don’t commission just one broker exclusively – they don’t place one single rental contract, they employ multiple brokerage firms at once. This usually gives the landlord better chances of renting properties out faster. The property seeker is then showered with offers and often doesn’t know at first glance that they have already been shown property X by broker A, or that they have already spoken about it on the phone with broker B. If a contract is then concluded, the situation can easily arise where several brokers simultaneously assert their claims for commission – often without the seeker being aware of any guilt at all.

The Master tip:
keep precise records about who presented which property to you when and when you got the brochures. The consultant you first contacted in regard to a certain property should also become your business partner where possible. If you have spoken to broker A about the property, but viewed it with broker B and concluded the contract with broker C, you will have to pay two commissions in the worst case scenario.

If you are sure you want to experience the highest level of consulting and service, then give your broker an exclusive contract to search for a suitable property, landlord or seller. The broker is contractually obliged to provide maximum service and you can also be sure you will receive it – payment here is performance-dependent, which means only upon successful placement. Another sweetener are the more favourable conditions: as the broker is working without competition, i.e. with a very high probability of contract conclusion, they can offer much more favourable terms – a lucrative deal for both parties. And if you should still get offers from other consultants or become aware of other offers yourself, your consultant will be happy to coordinate and initiate contact with them as part of the exclusive search contract.

The Master tip:
an exclusive contract will save you a lot of time and effort and help you get to your goal in a much faster and results-driven manner. You can recognise a good consultant by the fact that they provide significant fee discounts in their terms and also offer them on their own initiative.

Figures in square metres are always approximate values, which is related to the fact that there are many different methods and ways to precisely calculate areas. Some talk about gross or net floor space (BGF and NGF in German), and yet other spaces are calculated using GIF (a standard developed by the Gesellschaft für Immobilienforschung [Society for Property Research]). These various calculation methods not only provide plenty of opportunity for confusion, they also ensure that properties and their respective dimensions may not be instantly comparable. The differences in space measurement can be between 15 and 20% depending on the calculation method used, and that’s a lot. In addition, square meterages are of no real use to the prospective tenant or owner if what they actually want to know is how many employees they can ultimately accommodate in the rooms.

The Master tip:
ask your commissioned property consultant precise questions about the methods used in space calculations, and take note of whether they freely offer to bring together comparable properties into one uniform, and therefore actually comparable calculation basis, for you. This is a service no good broker will ask you to pay extra for. After the space calculation comes the room planning – in 3D if desired – which then forms the basis for accommodating your employees in the new rooms. This service is also included in the fee of good consultants.

There are many buildings or offices that look good, even ideal, at first glance, but that reveal significant weaknesses on closer inspection as there is too much ‘dead space’ that is not usable and is therefore not efficient for you. The rule of thumb is around 20 sqm per employee, but you do of course also have to take into account whether walls can be changed around flexibly, how much a company could continue to grow in the new space, whether offices and communal areas are arranged sensibly…

The Master tip:
have your broker work up a usage concept for the space. This will mean you can quickly assess whether the room layout and arrangement makes sense, or whether you could even optimise your internal processes through ideal use of space.

Your broker will of course negotiate the lease, rental or purchase contracts for you; a good property consultant will go to great lengths for you and can also represent your interests in most cases. All contents of the contract to be negotiated must be clearly discussed and regulated. Brokers are not, however, lawyers, which means they cannot provide any legal advice in contract negotiations.

The Master tip:
take note of whether your consultant addresses the issue of legal advice – if not, ask them. A service-oriented broker will recommend their in-house property specialist legal advisor and inform them of the situation, so that you, the customer, do not have to lift a finger and are only minimally involved.

City centre or suburbs? Outskirts or industrial estate? Many things play a role when it comes to the right location – for example, different legal regulations and requirements apply to a production company than to an office building operator, and not all spaces come into question for all companies and businesses. Questions such as which other businesses are in the vicinity, how good the transport links are, whether there are shops and restaurants where your employees can go on their lunch breaks and so on, can also be important.

The Master tip:
talk to your broker about your plans and considerations. Do they ask targeted questions that help to clarify the above points? Do they bring up certain issues or do you have to ask them to provide this consulting service?

Acquiring a new property is almost always a major project for a company – starting with the search for the right property itself, through moving employees with all their furniture, to hooking up the last PC. The broker doesn’t have anything to do with that? We don’t agree.

The Master tip:
check which services your broker really offers and then consider how they could actually make your life easier if they didn’t just recommend craftspeople and suppliers, but also coordinated and managed them for you. And also if they personally vouched for the results and quality of the services.