Observations & Conversations
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In no way did I bash
brokers, if anything I extolled a few of their virtues |
I have been accused of broker
bashing by one of the most influential people in the retail industry, because my
January column recapped news from the ICSC New York show and one of the topics
in my conversations were exclusive retail brokers. As you know, monthly I tell
you what I’ve heard on “the street.” In the column that ruffled feathers, I
quoted what people had said to me, not necessarily the opinion of the messenger.
Here is exactly what I wrote:
I think the biggest complaint I heard was about exclusive retail reps, after the
usual whining about the stock market and the Presidential election. While
walking the halls, here’s what we heard some of your fellow dealmakers say about
exclusive retail brokers;
“The exclusive retail brokers have ruined the industry.”
“Networks like Chainlinks will be the cause of massive store closings and
they’ll probably get hired to do the disposition work.”
“Being an exclusive for a landlord is fine, and that’s the way we’ve worked for
the past 20 years. It’s only been recently that the brokers control the
retailers and are making decisions on sites based on the commission — not how
well the store will perform.”
This is the stuff I can print, even after I promised never to divulge who said
what. You should have heard the rantings, punctuated by four-letter words, that
were spewed by frothing landlord-oriented brokers and developers. I believe that
for smaller chains and extremely high-end retailers an exclusive broker can be
the catalyst to growing the company by providing truly specialized knowledge.
Just last week, I talked to a regional home-improvement chain that is rolling
out an upscale specialty store concept that needs the “Rodeo Drive” locations of
the world. The real estate director called me in search of comparable rents for
a certain market. My suggestion was to find a broker to represent the company,
since she probably wouldn’t get return phone calls from the leasing agents from
developers, because she has an “unknown” concept and more importantly because
she needed information that an experienced boutique broker would have already
compiled. As to why a national chain that pays at least market rent signs an
exclusive agency is beyond me. If you’re a national chain that needs really low
rent or needs big bucks for tenant improvement without a financial statement, or
if you’re looking in urban markets, then it behooves you to enlist exclusive
brokers, because you have to kiss a lot of toads before you find a prince of a
site. In those cases, the broker really earns his/her keep.
In no way did I bash brokers, if anything I extolled a few of their virtues.
Yes, some brokers are lazy bums that know more about litigation than negotiating
a lease. Yes, some brokers never return phone calls. (I really wish I had the
guts to tell these national chains when their exclusive broker won’t return any
of my 30 messages regarding their space needs). Yes, some brokers are stupid and
don’t have a clue about the big picture, but at least this type can stay focused
on getting their commission agreement signed and collecting a commission. These
are the types that give brokers a bad reputation and stir up emotions of extreme
loathing, but more important, some brokers save their client’s tokus when the
developer needs to increase cash flow or the retailer needs to dispose of poorly
performing stores or find the perfect, yet impossible site that generates high
sales volumes. If we didn’t believe brokers are an important part of our
industry, we wouldn’t give them so much press coverage when we report on their
recent lease signings, exclusives, centers for sale and existing space for
lease.
Part of my responsibility as publisher of The Dealmakers is to tell you the
truth and often people can’t handle it. We’ve gotten complaints that our
publication is too negative when we write about store closings and bankruptcy
filings. (If you want to live in a rose colored world; there are plenty of our
competitors that write predominantly about their advertisers and it’s always
good news). The truth is that 95% of the articles in The Dealmakers are on
shopping centers being built, retailers looking for locations, people wanting to
acquire property and existing space for lease... where’s the negativity in that?
Also, it’s essential that The Dealmakers gives you a well-rounded overview of
what’s happening week to week and part of being informed is hearing the good and
the bad news.
It’s truly a great compliment just to be noticed by this esteemed fellow, but I
want to set the record straight... the man I sleep with, the father of my son
and the person I work side-by-side with is a broker (his name is Ted if you
didn’t already know), I used to be one, and some of my closest friends are
brokers, plus I spend a lot of my days playing match maker between brokers,
developers and retailers. This accusation of broker bashing is not only truly
misguided; it’s about as ludicrous as calling me an anti-Semite (unless you’re
paranoid and think that I had an ulterior motive in marrying a Jewish person) or
a chauvinist; for obvious reasons, none of the labels fit. Now that I’ve cleared
the air, onto more productive and positive things, like making deals in Vegas.
Be sure to stop by our booth (667 Sixth Avenue) to say hello and grab some
Bazooka bubble gum and a glass of lemonade. (I always feel like the Beverly Hill
Billies at the show compared to some of the elaborate booths that require you to
have an appointment before you can enter.) Don’t be shy when you walk by our
booth, come on in and shoot the breeze for awhile. Also, you’re invited to our
annual Beer Bash on Monday starting at 4:30 in our booth, so mark it in your
calendar and we’ll see you there.
Ann O’Neal
Publisher