There is something happening in the commercial real estate industry that just drives me crazy: It’s the perpetuation of false information by those who should know better, or as I like to call it, Big Broker Bullsh*t.

A Quick History of Commercial Real Estate Brokers

With few exceptions, almost all commercial real estate agents start their careers at a big brokerage such as CBRE (where I started), JLL, or Cushman & Wakefield. The small, boutique brokerages like MCRE are generally started by agents who have grown frustrated by the big brokerage machine and want to provide a better service for their clients.

That’s not to say big brokerages aren’t beneficial—they absolutely are—but it depends entirely on who the client is and the service level they require. For example, if Coca-Cola was planning on opening up a Canadian headquarters and needed advice on where to do that, whether to build or buy, etc. they would almost certainly enlist the help of a big brokerage with offices across Canada who can aid in that search. Additionally, because of the work involved, a big brokerage will have analysts on staff to help do those calculations quickly and come up with a solution. Makes sense, right?

But what about John A. Businessman who owns an industrial property in the GTA and wants to sell it for the highest possible return on investment? Is his best bet to go with the big brokerage? Agents at the big brokerages would like you to believe so, but I’m here to debunk their ‘Big Broker Bullsh*t’ and explain how in many circumstances a small brokerage can out-perform the big guys.

The Big Broker Bullsh*t

In commercial real estate, who your agent is matters—always remember: you do not hire the company, you hire the agent. While you may be willing to hire your neighbour’s niece to sell your residential home, you definitely want experience and competence on your side when transacting a commercial deal. As such, it’s an incredibly competitive industry and agents are expected to tout their superior skills over those of their rivals—what they are not expected to do is mislead potential clients with false information. Unfortunately, it happens all the time.

Agents from the big brokerages like to impress potential clients with the sheer size of their brokerage, making it seem like all this awesome power will be at the client’s disposal and that boutique brokerages just can’t compete. Well, I’m here to tell you that’s nothing more than Big Broker Bullsh*t.

Big brokers love to show off their big teams, international websites, and big advertising dollars. Read on to find out why these are actually hindrances to anyone except the Coca-Colas of the world and how smaller brokerages can actually return better results for commercial property owners.

“I have six associates working for me!”

Big brokerages love to show off their teams; every top agent has at least one junior agent working under them and probably an associate handling marketing, customer service, etc. Sounds great, right? Except, it’s not.

Remember when I said above that having an experienced, competent agent matters? I wasn’t lying. It’s the single most important factor in ensuring the best result from the sale of your commercial property. At the big brokerages, the top agent (you know, the one with the experience and competence you need) will be your primary point of contact right up until you sign on the dotted line. Once they have your listing it’s their team, not them, who will be doing the day-to-day work to sell your property. That could be anyone. It could be a 22-year-old junior agent fresh out of college who struggles to pronounce the word mezzanine; it could be the marketing assistant hired because of her graphic design skills who couldn’t tell you the difference between an industrial or office property; it could be anyone.

Big brokerages make money through volume, which means transacting as many deals as possible, whereas boutique brokerages rely on building relationships and make money through repeat business and referrals (for a more in-depth discussion on this, read our blog post). For Coca-Cola, the red carpet gets rolled out, but for John A. Businessman the quicker the property gets turned over the better—regardless if that’s the best deal for the client.

At a small brokerage such as MCRE, your property is handled every step of the way by the same experienced, competent agent who signed your listing in the first place. At every touchpoint, every interaction with potential buyers, a professional will be handling your listing and looking to get the best possible deal for you, not the quickest.

A big team of associates might look impressive, but keep in mind that it’s the efforts of one person that have the most impact.

“We’re international, your listing will get more exposure!”

It is true, the CBREs of the world have a global reach that boutique brokerages can’t compete with—but we don’t want to! Big brokers are always trying to oversell the benefits of dealing with a global brokerage, but if you aren’t a multinational corporation, the benefits really aren’t that advantageous.

Do you know how often it is that an investor in Thailand is browsing a big brokerage website, randomly comes across an industrial property in Canada, and buys it? Never. It never happens.

In fact, most sophisticated buyers use the universal MLS system to search for potential investment—a system open to all brokerages, big and small. Having your listing on a big brokerage’s website is not some instant portal to a world of buyers, it is simply a tool big brokerages use to convince you they’re offering something competitors can’t. Don’t be fooled.

“We’re a billion-dollar company, imagine the advertising we can do for you!”

This one is my absolute favourite of the Big Broker Bullsh*t, convincing clients that because the company makes billions, somehow a huge percentage of that is getting funnelled into client advertising. Not. A. Chance.

Here is how advertising works at a big brokerage: It is calculated based on the potential fee the property is expected to bring in. Did you catch that? The marketing dollars put into your property are reflective of how much revenue your property will generate, not the marketing dollars at the company’s disposal.

For example, let’s assume you are selling an industrial property that is expected to sell for $1.8 million. Typically, a commercial real estate agent will receive a 2.5% commission on the sale of a property, so that’s an expected commission of $45,000. Each brokerage will have a different marketing percentage, but from that number they will calculate the amount of marketing dollars available to spend—for our example, let’s say it’s 4% (the current average at most big brokerages), or $1,800. Despite listing with a billion-dollar brokerage, the absolute most that will be spent on marketing your property is $1,800—and less if the agent can get away with it.

At MCRE, our philosophy is different. We build our business through relationships, which means doing our best to get the absolute top result for our clients. If that means spending a little more than we typically do on marketing, no problem. Sure, we don’t have billions of dollars to spend, but neither do the big guys! What I can promise you is that we won’t reduce your marketing strategy to a simple mathematical equation—we’ll do whatever it takes to get you the best return on investment possible.

Tired of Big Broker Bullsh*t? Try Boutique Brokerage Service!

If you’re Coca-Cola looking for the best South American country to open a bottling plant, I would advise contacting one of the big brokerages. But if you’re a savvy business person looking to get the best result from the sale of your commercial property within the GTA, why not give a boutique brokerage a try!

MCRE offers the same experienced, competent agents you would find at a big brokerage and promises that 100% of the work on your listing will be completed by them. We also market your property in all the same places a big brokerage will and best of all we are focused on ensuring your satisfaction, not transacting a deal.

Give us a call or send us an email for a free consultation!

Debunking Big Broker Bullsh*t