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CRE Broker Incentives Cash or Trash?

Below is a back and forth conversation with Lowell Peabody and myself.  Reference Links:  http://www.rbjrealestate.com/PDF/InItToWinIt_DanRoad_Eblast.pdf

http://www.tourtowin.com/

Lowell Peabody wrote:

Hey Duke, what do you think about promotions like this?  When does the client worry about this? Isn’t this a conflict of interest? Perhaps not if the broker is taking the client on the trip with him… This is simply demeaning to brokers overall in my opinion. Why is it that certain people criticize our industry?

Duke Long  wrote:

Interesting..at least they are trying…something to get brokers to their properties. A conflict …as defined by who…only when you are not counting money is there a conflict. Demeaning…yes very much so…if brokers had clients they would certainly look at all available properties…we need a contest to help us pick the best property ??? Summing up…I admire the incentive thinking ..I hate the context and the total trash way that it is thrown at our industry. Always, always it’s about $$

Lowell Peabody wrote:

I agree. The conflict is potentially when as a tenant rep these promotions might be perceived to stear a tenant towards a property. What has always been interesting to me is that these are offered to brokers yet the most important person to influence is the tenant. Admitedly, I am not sure I have ever seen a promotion to end users.. Have you?

Well,does this not bring up all kinds of fun possibilities!  Do we in commercial real estate have a stated code of ethics?  Look at the list below…  how would you apply them to the program above?   Would you use them at all?   Will you have the guts to comment if you don’t?  This should be interesting!!  Please jump right in.

Honesty

Objectivity

Transparency

Integrity

Carefulness

Openness

Respect for Intellectual Property

Confidentiality

Responsible Publication

Respect for colleagues

Social Responsibility

Non-Discrimination

Competence

Legality

Photo via Flickr:http://www.flickr.com/photos/daviddmuir/

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  • Nadina Cole-Potter

    Wow!! Interesting marketing initiative. As a matter of practicality (in my limited leasing experience), it is difficult enough to find/show properties that meet the client/tenant’s requirement variables. Having to target properties which may or may not be suitable for the client or having a client whose requirements/wants match the properties in the contest during the contest period seems like a stretch.

    Would you waste your client’s precious time to shlep him/her to a property that was unsuitable just so you could enter the contest?

    I could see adding a contest as a sweetener for brokers to visit the property on a broker tour. And, frankly, I would use the bigger rewards to motivate the tenant (if that isn’t crossing some ethical boundary — maybe for the tenant).

  • Elizabeth S.

    I have seen these broker incentives in various forms over the 18+ years I have been in the business. As a tenant rep broker, I always disclose to my clients prior to visiting properties that offer broker incentives. I explain what the incentive is and make it clear that it has no bearing on me because they will be making the decision on which property works best for them and I’ll still be making a commission regardless of where they go. If landlord reps really want to influence decision-makers, one of the best ones I have seen is simply giving a Starbucks card to everyone (clients included) when touring the space. Clients get so excited about a simple little $15 Starbucks card and really appreciate the thoughtfulness. These broker incentives are more about creating activity and interest so the owner feels like the marketing efforts are maximized.