We continue to form strong partnerships with brokers, because of the mutually beneficial experience for CAM, CAM clients, and brokers alike. Below are three benefits net lease brokers accrue when they partner with us.
Professionalization of net lease ownership with efficient processes and ongoing communication
Asset managers professionalize the real estate ownership process, beginning with accounting procedures, document storage, and market monitoring.
Proper accounting procedures should be implemented at every level net lease ownership. Recording real estate bookkeeping transactions in Excel and sending them to an accountant on an annual basis is not a reliable method to monitor a property’s profit and loss or balance sheet. Proper accounting will allow for better tracking of net income and property level cash flows, and increase the value of the property at the time of sale.
Having an organized document storage system reduces the lead time for brokers to get a property on the market. No need to search through old filing cabinets for as-builts or surveys anymore. All of the documents associated with the property are stored in electronic form. This pro-active document storage process also prevents liens or other title defects from occurring and holding up a broker from closing deals.
The most critical benefit to net lease brokers who partner with asset managers is the ongoing communication around the property. Asset managers monitor the property, the tenant, and the market, and provide a full picture of the asset’s position. This analysis gives a broker the data needed to begin a dialogue around the sale of the property.
Focused property strategy to maximize value, salability, and lease ability
Asset managers main role is to monitor the net lease properties and tenants in their management portfolio on a consistent basis. Consistent monitoring allows the asset manager to determine the best strategy for a property over the ownership period.
For example, we were hired to monitor Krystal Company properties in the State of Florida in Q3 2019. We saw concerns with corporate Krystal and advised that a bankruptcy declaration was likely looming. We then analyzed market rents, market supply of competitive properties, and the ability for the properties to attract replacement tenants.
After this, we negotiated and structured the leases to minimize the client’s downside risk by maintaining the income from the current tenant and securing a corporate Krystal Restaurants LLC guarantee out of bankruptcy, and then maximized the upside value by securing the ability to lease the property at higher rents should a tenant be found.
Passive revenue and client target control
The most challenging aspects of net lease brokerage are having a competitive advantage to acquire new clients, preventing a client from switching brokers, and having a consistent and predictable stream of income.
We provide net lease brokers with a first right of brokerage for any referral client. This right of brokerage protects brokers’ relationships and sales outreach efforts, whether they have completed a hundred transactions with a client or made one cold-call to a net lease owner.
We also pay a 10% referral fee to brokers in year one of our net lease management process, and 5% every year thereafter. These fees allow for a consistent stream of income to supplement the volatile income from brokerage.
Start a conversation
Are you a broker interested in partnering with CAM? Learn more and start a conversation at https://camnetlease.com/brokers/.