The following Q&A was completed as part of our conversational Commercial Real Estate FAQ Interview Series, we hope you find it helpful.
When you develop unique and positive relationships with brokers you can configure unique deals with them as they relate to their fee structures. Brokers are often happy and surprised to hear they could be cut into a deal and they’re more than willing to work with brands to build wealth together. First work on building these relationships with hungry and open minded brokers, keep good on your promises to maintain these working relationships going forward.
Richard Wilson: For a niche like self storage, we were chatting before the video started about working with a lot of different brokers, so I’m curious – are there any brokers with a really unique fee structure? Like for example is there a broker out there that will take half their fee in equity in the deal instead and just charge you less fees and you like that? Is there any other creative stuff that brokers are doing to win your business and be more aligned?
John Manes: We’ve done all kinds of stuff. I mean so that’s what I said before, it sounds like we’ve been an overnight success but the reality is it’s all based on those relationships of trust. So if you’re getting into a conversation with a commercial real estate broker and you say to them “Look, if you find me a true off-market self storage deal, and you bring it to me and we buy it, I’ll give you a couple points on the deal or I’ll make you a sponsor right along with us or whatever the case is.” Well you better damn well do that when they bring you the deal, right? And that’s the problem with this industry is “Ah, well you know what? I told you that but there’s not enough to share here, so I was going to do that but I really can’t.” Well, tell them that in the first place, right? So we’ve done a whole bunch of that. We’ve got different brokers that are partners on our deals, we’ve got different brokers that have left their fee in the deal, and we’ve got different brokers that we strictly funnel free deals through so that they can be part of the deal. There’s – we’re loyal to a fault in that way. And through that I like talking to young, hungry brokers that are trying to not only get into the industry but are trying to build wealth for themselves and I tell them just that. If you bring me true off-market deal, I’ll cut you in. They go “Really?”, well yeah. And they go “Wow, okay!” and I’ve probably done 5 or 6 of the 25 deals like that since we’ve done them. 25 deals.