Our regional development agency is wanting to use a 100 acre section of our new industrial park to let a broker market. I guess I am not sure on this. We and others pay funds to the local development agency to market and work with the State ED people on landing business there. It seems like passing the buck a little to me. Am I off base here? Is there actually value in that?
IMO it's a waste of money in hiring a broker. This is not residential real estate where they control MLS and if you don't use a realtor then your property is in a blackhole. Commercial space is different. Plus if your EDC is properly funded then they should have a CoStar subscription where they can upload the information if they feel the need to have property listed for all brokers to see. Your EDC can handle the marketing and the showing of the property and their or the cities attorney can handle the paperwork to facilitate the sale.
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I agree with Brocktoon on this. There is generally little value in using a broker if your organization is capable of ensuring the site is listed in the usual venues. If you have a state ED listing program, as most states do, you are usually pretty well covered. You can also make sure it gets to CoStar and LoopNet. In my experience, brokers typically bring in the local companies that would be likely to search out the site anyway. Put a couple signs out on the property with a phone number and email address of someone knowledgable, who will answer the phone during business hours. The out-of-state prospects come through the state's ED agency.
What I have recommended is making it known to the commercial real estate community that you will pay a commission on any prospects that they bring to the industrial park. You can decide what is fair based on teh sales price and the amount of work you require of the agent, versus if you will have the city attorney or someone similar doing most of the negotiation and drawing up a contract. In that way you are giving an incentive to all brokers to bring prospects to the site. You won't do yourself much of a favor giving an exclusive contract to anyone.
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