My Way
And He Thinks I’m The S.O.B. ?
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About a year ago I worked with a developer on two sites for a retailer we do work for. For a variety of reasons which were no one’s fault, we couldn’t make a deal (the retailer didn't like the location). Anyway, a few weeks ago the developer ran into our client at an ICSC show and re-propositioned them. He gave the retailer a dog-and-pony show, so our client agreed to look at one of the centers again. |
The retailer called and told me what was happening, and I called the developer and was told he didn’t need me, he’s dealing direct. The client had me go with them to visit the site along the developer, much to the developer's chagrin. Long story short, we rejected it again for the same reason we turned it down the first time (the site stinks). In a private meeting, the developer ended up ranting and raving at me over the new deal dying. He contended I didn’t try and "sell" the location to the tenant (and he’s right, I’d rather not make a commission than have the developer make this deal--plus if the deal was made, I’m sure he wouldn’t have paid. But most importantly, the site stunk last time and it still stinks).
This S.O.B. tries to screw me on a commission and he’s mad at me?
It’s like another a**hole a few years ago who wouldn’t pay me a commission even though I had a signed contract, brought in the tenant and more. While we were waiting on a court date for the lawsuit we brought against him, he wanted me to work on another one of his properties. When I asked why I’d be that dumb to work on another center when I can’t get paid for the first, he replied this was for a "different legal entity" and therefore I shouldn’t object (even though he owned both corporations).
I sincerely believe he couldn’t understand why I wouldn’t work for him again. He's not only a crook, he's also stupid.
Why do so many developers expect the broker to work for free??? I get calls all the time in which, after stating my commission structure, I’m told it’s too high. I then offer to work on a per diem basis and then the owner acts dumb (even for a developer) and says "You expect me to pay you IF YOU DON’T produce? We then go back and forth (it usually occurs on a day I’m bored and feel like busting someone’s chops) and I explain how much they save if I work on a per diem compared to the commission. It seems they want to pay the lower amount only if I succeed and fulfill all the other contingencies they like to add to the commission agreement.
The older I get, the less I like brokerage, not because of what I have to do to make a deal but because of what I have to do to get paid.
On a different note, we’ve received numerous calls regarding the ICSC’s revamping of the Vegas show, which will now have the leasing mall open all day Monday, Tuesday and Wednesday, May 21-23 instead of a partial Tuesday and all-day Wednesday plus part of Thursday. In addition, they increased the cost of leasing space, from $5.05 psf to $6 psf. Between this increase (the first for Vegas in a quite awhile) and the increase for membership dues, the ICSC should be in an extremely good cash flow situation. I’m not happy about these increases but the addition $1,000-$1,500 a year more we’ll be spending with the ICSC will not have a major impact on us (thank you, Lord, thank you). While my "gut" reaction to the leasing mall changes is favorable (because I think we can still arrive on Friday for setup but now we can come home on Thursday instead of Friday, which is desirable. I’ve learned over the last 20 years that I’m always anxious to leave for Vegas and even more anxious to come back, so a day less is good, aside from saving a couple of bucks on hotel, car rental, etc.), I also think this change will make Wednesday, the last day of the show, busier all day rather that having it die out around 12 pm. or 1 pm. The ‘negative" of this change is twofold. First, the educational sessions and seminars will run concurrently with the leasing mall. What that means from a practical point of view is many developers will NOT send their younger agents to the sessions to learn; they will want them on the leasing floor doing deals. Since I rarely went to these sessions, I could care less personally, but attendance for these events has been good in the past and I think will drop substantially. Maybe some of the larger developers wanted this change so they could save on hotel and entertainment costs by not sending in their people sooner. Who knows?
The second effect, which is not the ICSC’s problem, is that on Monday and Tuesday morning there are usually a number of private parties and meetings. Now these events and meetings won’t happen. Lots of people won’t come in earlier to continue this tradition since it would require they arrive over the weekend. The more ambitious ones will, but a large number won’t.
Personally, I think I like this new setup and it should be more productive for us but time will tell, so I’ll let you know better at the end of May.
News from the 'Net: The news broke right after @dealmakers.net went to press, so we couldn’t comment on the fact that two of the major dot-com financing sites are shutting down (CapitalThinking & Redbrick). They were losing megabucks and doing no volume, so their future was poor.
Now they will become a software company "helping" other mortgage companies process their paperwork. A productive mortgage broker could do in a year more volume than their entire site(s) did. I guess for the short term, the personal touch is still required.
In other news: I didn’t attend the recent Value Retailing News conference in Florida but I spoke to several attendees and overall, there weren’t many happy troopers present. Business is still not hopping. Many of the developers are having cash flow problems, causing some of the secondary centers to deteriorate, and few new projects are being announced. The centers that are positioned best appear to be in tourist markets or extremely close to large population bases. This was an industry that was growing like crazy for awhile but had a dual hit of overbuilding and tenanting rotten retailers.
Final thoughts: I recently received a seminar flyer from the National Retail Tenants Association (413-525-4565) which is having their annual meeting in Orlando, FL during December 10-13. This is the organization for lease administrators--they’re the people working for retailers that do all the dirty work but don't get the fame or fortune that leasing people get. They try and make sure the developer doesn’t shaft the retailer too badly and that options are exercised on time. They make sure the HVAC is repaired, CAM charges are correct, etc. etc. I found some of the topics for their conference quite interesting. One seminar is on "Exit Strategies That Work" which should really be called, "How to Legally Get Out of Your Lease at a Non-Performing Location." This appears to be a growth industry as more and more retailers bite the bullet on under-achievers. The other interesting title is "Getting Your Landlord’s Attention and Response to do What You Want." In other words, "Getting that SOB to Return Your Call and Live Up to the Lease Agreement."
While the above two subjects have been a problem in our industry forever, it seems to be getting worse and many developers/owners are taking the position that the easiest way to eliminate a problem is to NOT speak to the retailer/tenant in their center and therefore there’s no problem.
Sounds like the advice you’d get from most lawyers.