April 6, 2007 by jack petrie.

CRESA Partners’ client Bill McCloskey of Email Data Source recently contributed two articles to MediaPost’s Email Insider on the lack of passion among email marketers:

http://blogs.mediapost.com/email_insider/?p=394 

http://blogs.mediapost.com/email_insider/?p=398  

They got me thinking about being a service professional and how a little dose of passion can be quite a differentiator.

Bill laments the lack of industry evangelists in his profession.  I believe commercial real estate, like email marketing, gets a similar bad rap.  I can sometimes see the physical response from people when I introduce myself and tell them what I do.  But you know what, I’m passionate about what I do and see myself as an industry evangelist.  To describe it succinctly:

“I help companies control occupancy costs”.

The other point that Bill touches on are the virtues of specialization.  In real estate, too many firms and advisors play both sides of the fence.  One day (or minute) they’re representing a landlord, the next day they’re putting on their “tenant broker” hat and trying to pretend they can do both things well.  Well, you know what, they can’t.  There aren’t enough hours in the day.  And there is an inherent conflict of interest in playing both sides of the real estate field.

Specialization runs deeper and being an expert in a specific industry (i.e., technology) is even more challenging.  Many professionals have a bunch of clients in a particular industry, call it a practice group and provide the same “cookie cutter” solutions to each client.  To truly understand an industry, you have to live in their space, understand their business, attend their industry events, know who’s whom and get inside their minds.

It’s a huge time commitment and again, there aren’t enough hours in the day.  But the end result is a reputation as a service provider who truly “gets it”.  And that reputation creates “buzz” and word-of-mouth referrals.  And you have to be passionate to pull it off.

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April 3, 2007 by jack petrie.

It was bound to happen.  Every few months I hear an offhand comment, almost an afterthought to a phone conversation.  A throwaway remark that says “This profession stinks, I don’t respect it, I’m tired, I give up”.

The circumstances this time: Another broker recently shared a new listing with me (confidentially) so that I could present it to a client and prospective tenant.  When I asked if I could share this info within my office, this broker asked that I keep it in confidence, but then remarked - “you’re going to do what you want, anyway”…

Wait a minute, now!  Has commercial real estate sunk so low in its ethical standards even among its practitioners?  If there is no respect among colleagues within the brokerage community, how can we expect any respect from our clients and prospects?

Another example: in confirming that leases were being prepared to finalize previously agreed upon terms and conditions, a landlord’s broker said to me, “better hurry, anything can happen?”.  When I queried LL’s broker by asking, “does that mean that you not going to abide by our verbal understanding?”, I was informed “well, this is commercial real estate”.

What the heck does that mean?  Do you not have any respect for yourself and your chosen profession?  How else will our profession elevate itself from it’s current slot on the “respected professionals” standings, (just above used-car salesman).

A final story: our firm recently extended an offer to a new hire.  On the agreed upon start date, this employee didn’t show up, didn’t call, no letter, nada.  And this was not an administrative or junior professional, but an experienced real estate professional.

Wow!  Is that what too much time in this industry does to a person’s character?

As a result, I feel an overwhelming need to reiterate my personal professional code of conduct:

1) I will not lie,

2) I will treat everyone with respect,

3) I will return phone calls promptly,

4) I will help others without asking for reciprocation,

5) I will present and conduct myself professionally,

6) I will identify and avoid conflicts of interest,

7) I will be an objective fiduciary to my clients,

I will endeavor to identify and uncover any and all hidden financial obligations on behalf of my clients,

9) I will not hesitate to take an ethical stance,

10) I will represent my profession well, and strive to elevate the perception of my profession.

P.S. - I’m sure I will add more as I continue to practice commercial real estate.

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February 28, 2007 by jack petrie.

Attorneys get a bad rap.

I agree, $400/hour for legal review of a document is a lot of money.  However, what most clients don’t do is to ask their attorney for either their hourly rate or a ballpark estimate of total hours necessary for review of a document.  Take that number of hours and multiply it by the hourly rate and just accept that number as a cost of doing business.  And most importantly, ask your attorney to let you know when he/she reaches that number of hours.  For example, let’s call it 25 hours and/or $10,000.

At this point, you have bought in to the attorney’s pricing schedule.  Here’s where the value proposition comes….

Consider a typical New York City commercial lease.  While most leases more closely resemble the White Pages in size, every lease contains a set of clauses created to offset and prevent historical contingencies that at some point in time cost a landlord some of his/her “M-O-N-E-Y”.

However, once a tenant exceeds the first $10,000 of fees for legal review, each incremental $400 hour becomes more and more valuable.  

Over a period of time, a lease document will take a life of it’s own long past the payment of attorney’s fees, the relocation, and the occupancy itself.  However, many of the pro-landlord lease clauses can take effect, even after the lease term.  Careful negotiation of these clauses can have a much greater financial impact than the few hundred dollars (or few hours of time) invested.

Consider the downside: after concluding payment of an escalating rental stream over a ten-year period and vacating a property, you find yourself in litigation with your former landlord over a lease clause which you remember conceding in the interest of saving a little time or money ten years earlier.

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