The daughter of one of our Managing Directors was always destined to work in commercial real estate. Lauren Smith discusses the art of negotiation in her role as Property Manager at SVN | SRD.
Below is an excerpt from the interview. Listen above for the full podcast.
Destiny. As you know, my dad, Gary Ralston, is one of the brokers here and I have grown up surrounded by commercial real estate. At the ripe age of five, I began attending networking events with dad, CCIM being one of the big ones. They always had them in fun places like Hawaii.
It was his dream-come-true for me to come work with him and it's been great. It is also challenging, which I enjoy. There's never a dull moment and you're not doing the same thing over and over.
Property Management. We're still on the smaller end of our portfolio, but we're growing exponentially. For the size team that we have, we're doing well.
Typically, it's dealing with tenants. Making sure that people have paid their rent, all the bills are paid, any maintenance crises are going to be taken care of. Making sure that owners are happy, have all their reports, and things of that nature.
Tenant & Landlord Representation. It's difficult to manage expectations, but it's the key to keeping everybody happy. You have to keep the tenants happy and you have to keep the owners happy. It's the same when you're doing sales as well, you're representing the buyer and the seller. Whenever you're in a transaction like that, it's a difficult position to be in, but that goes back to the art of negotiating. How do you compromise and keep everybody happy? That is the key to successful real estate transactions, but you have to compromise. With the owners, they want those numbers, they have other investors to answer to. Then with the tenants, they care about the aesthetics of the property and there needs to be a little bit more emotion conveyed in establishing that relationship. So there is a lot of that at play, dealing with business owners is a little bit different than dealing with a resident. Commercial real estate is a very different animal.
Leasing Representation. With leasing, you have to know your audience. If you're dealing with a national tenant or someone who has multiple locations, they understand what those types of leases look like. For a regular business owner that's opening a new location, you may have to word the terminology in a way that they can understand. Sometimes less is more, try and make it as basic as possible because if you confuse them, then the deal gets far more complicated.
Even though you're the owner's representative, you are still obligated to make sure that the tenant is informed and that they understand what they're signing.
Renewals. Typically, you can reason with a tenant and show the rates, “You can move if you want, no one is forcing you to stay, but we also have to have rates based on the market.” You have to try and help them get to terms with it. So, I try to word it in a way of “Listen, we love having you here, you're a great tenant. Here's all the exciting things we're going to do with the center this year, but unfortunately, things have gone up. This is where the rates are.”
The art of negotiating. Look at it from each perspective. What's the tenant's perspective? How is their business doing? They took a hit, but so did the landlords. Small businesses look at landlords or owners like they have all this money and they're able to help their business stay open. In some scenarios, that is true, but for others, it's not. Then we had to go back, stand a firm line, and it's not a fun thing to do.
It's still acknowledging their feelings. Just doing that, it does soften that blow so that you can get the rent that you need to. Then sometimes people are stubborn and they have to go to all the work of moving out.