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Brokers and Lawyers. A Reputation Earned.

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I stood in the cold with snowflakes hitting me in the face. The wind was hard, and I could just hear him say “ Let’s do this. Can you get the paperwork started and make contact?”
It was nearing the end of November. It was the prime holiday season, and I knew it was going to be tough getting any hard details about the property much less an offer that everyone could agree to.
“I already know the people I need to connect with. I will get back to you as soon as I get something concrete you can look at.”
Walking to our cars I reached for the car door and hit the button on my phone to call my wife “It’s on, we are going to do it.”
“Really” she replied. “Ok, I will see you when you get home.”

That’s how it started.
It would take over one whole year of my life. It would include millions and millions of dollars in construction management attorneys and brokers fees. It would eventually involve the state county city municipalities and not in a good way.

The property was owned by one of the world’s largest retailers.
It was represented by one of the world’s largest brokerages.

It took me two weeks and a phone call every day for that two weeks to get the information needed to get a contract started. I got hung up on four different times. I made a call to a friend of mine in the big city to have him reach out to the broker just to let him know I was a real person. When we finally connected the big broker said “ I will send you the info, but I will not say that the information is accurate. You need to do whatever due diligence you need on your own, and I give this less than a 1% chance of ever happening.”

Once we did our due diligence, we created an offer to purchase. Which of course they rejected. They then decided that they needed us to use their contract, and we could just fill in the blanks. After consulting lawyers, we did just that and resubmitted the offer. Which of course they rejected three more times. We could not understand why they rejected it three times because it was the exact price and terms they stated in their initial package. After several phone calls and emails, they said they would sign the contract and send it back. And so they did, with at least seventeen changes to their contract marked out and initialed, including the price that was now five-hundred thousand more. Their explanation for that was that it would “help them cover any additional fees they might incur.”

One conversation I remember with the broker was when he was in his car in Colorado on a ski vacation. When I mentioned the price increase his phone magically started cutting out, and he said he couldn’t hear and would call me in a week or so. I called my friend in the big city. He called the office of the big broker. He asked a friend there if the broker was available. His friend said that the big broker was at lunch, and he would leave a message for him if needed. That was the same day.

We did finally get a contract signed and agreed to by both parties. I remember standing on the practice range before a club tournament and one of the lawyers involved in the deal walks up to me and asks “do you think what you are going to make on this deal is fair?”
“ Why do you ask” I replied.
“ It seems like a hell of a lot of a BIG DEAL and a lot of money for not a whole lot of work.”
“ Really, and what you are doing has more value?.”
“ I think my firm will make this deal happen without your help.”
“ Do you have ten minutes early Monday morning to meet? Ten minutes is all I ask.”
“ Sure, stop by our office.”
Monday arrives, and I walk into the lawyers office with the principal buyer. We exchange handshakes, and they offer coffee.
They decide to get things started “so, you asked for ten minutes how can we help?”
The principle buyer doesn’t sit but leans on the back of a chair. “You’re fired. Send me any final bills.” He turns to walk out.
The lawyers stand up ”but why, can we talk about this?”
“You told my broker and partner that you can do the deal without him. I can’t and won’t.”
“ I think we were just expressing our position in the deal.”
“ Yes, you were. Now you are done. My partner and I will find other representation. Have a good day gentleman.”
We both turned to the door and started down the hallway. I turned to look. They both had their heads sticking out the doorway. I smiled and held the door for the principle buyer and with a nod we headed out into the warm sun.

Postscript:

The big name broker is now National Head of Brokerage. (I looked it up.)

One of the lawyers went on to be the head of the county council and area plan commission. He is now a major developer.

The other lawyer is now a judge.

This story may be a work of fiction (in case someone wants to sue my ass) or not.

Just imagine the things that I am not writing about.

 

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  • Duke –

    Classic tale of the broker and lawyers “gone wild” in a deal they probably thought would make their year. They broke several essential rules of deal-making. For the broker, never dodge or evade or hide. For the lawyers, NEVER EVER get into the business of telling your clients (much less the folks on the other side) what the deal points should be or your opinion on the transaction and who is getting paid or getting sauced. The sad, but true result of this tale – which happens too often in large transactions – is that everyone is looking to give their input and GRAB what they can. And, all the bad guys seem to have made out like bandits for their bad advice and conduct. I am a lawyer from a mid sized City and practice in commercial real estate. Our mantra in the firm is be honest with the client, never give business advice, and never make your opinion paramount to getting the deal done. Period. Sorry this was not the result here.

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