A Little Clarity Maybe? “It’s All About Relationships In Commercial Real Estate.” That’s Bullshit!

A Little Clarity Maybe? “It’s All about Relationships In Commercial Real Estate.: That’s Bullshit!

Well as things would have it if you post up an opinion and or point of view you will get the conversation started. Case in point my last post titled “It’s All About Relationships In Commercial Real Estate.” That’s Bullshit!

A few thousand views later and it seems some people want clarification or at least a little more fuel for the fire.

Hey fine with me! Let’s Let It Rip!

A singular point that I made was that relationships or relationship building really was and is a waste of time. It’s about the location and the data that help define that specific location.

Let me help define that point with a simple scenario.

Site selection on 5 properties for a fast casual restaurant site.

Site 1. Great demographics excellent accessibility great price low visibility.

Site 2. High traffic excellent labor pool construction issues fair price.

Site 3. Tax incentives high visibility close to distribution center highest price.

Site 4. Local labor incentives good accessibility tough labor pool best price.

Site 5. Size is too big perfect corner state and local tax incentives fair price great demographics.

You say “hey wait,there is not enough info here to really make a decision.” Ok, I agree with you on that point.

Layer on a few more data points and what do you have? 5 sites that you need to analyze digest and then pick the best one for your restaurant. Make the offer tie it down and start the process of building your store.

That’s it. That’s all there is to it. Which one would you pick? You know what’s coming next!

Where in the hell does the relationship with the broker or company representing the site you picked MATTER?

Let’s say for the sake of argument that site 3 was the one that made the cut. Why? Do you need the complete history of the company the CEO and brokers of the company of site 3. Is that the thing that swayed your decision away from let’s say site 5?

So let’s put it another way! Both companies representing sites 3 and 5 are the most reputable ethical moral professional companies and the nicest people you have ever met. You are almost heart broken to take the call and tell the rep from site 5 that they are not going to get the deal. Of course the rep asks if there is anything they could do to persuade you other wise and your simple answer is NO!

Now it is no stretch of the imagination that the rep get’s off the phone and steps into his bosses office and tells them that they did not make the cut. Of course the big boss wants to know why and of course the answer is?????

Yes, the OTHER SITE was a better business decision for the buyer. Not a damn thing the company rep for site 5 could have done to make one little bit of difference.


So now you are saying that it’s time for you to “Call Bullshit.” Fair enough. A few professional souls already have. Go to the discussion and comments in the Corporate Real Estate Group on LinkedIn.

Here are a few thoughts on the comments that stood out to me.

“Relationships build clientele and clientele builds business.”

Hard to argue with this one but if your site sucks your site sucks.

“Brokers create a value add to clients by creating a commercial real estate strategy and implementing it.”

Ok, I get the value add but other that shuffling some paper help define value add for me….and be careful.

“At the very least creating a “temporary” relationship while doing the deal helps solidify the deal.”

So it’s not really a relationship at all it’s fake it til you make it?

“Creating a good feeling or supposed trust will help make the deal.”

Based on what I am not sure? The broker has nice glasses? So therefore that makes me trust him?

“All things being equal a relationship will build trust and help the deal.”

When are all things ever equal?

“Maybe we should just buy him some diapers”

God I loved this one 🙂 Don’t stand on the soapbox if you are not prepared to take some hits!

Does Sam Zell Really Care If He Ever Meets Duke Long?

Serious question. The answer is probably not. Does that mean Sam ( The Grave Dancer) is not a friendly professional and interesting guy. Hell no!

Now let’s throw this into the mix. I get a hold of one of Sam’s people and I suggest that there is a building almost within view of his office window that is going under and that he may be able to get one hell of a deal for it. Maybe a hotel or condo conversion is possible and I know that the sellers are bailing and the bank is going to get hurt bad.

That scenario is not that far fetched by the way…I think he went for a deal very similar to this last year in Chicago. I can only imagine the amount of bullshit he is pitched on a daily basis.

Sam does not know me from the man on the moon and why should he? Should I take the time to cultivate a relationship with him? Should he even consider taking the time to cultivate one with me?  Why would Sam and I ever need to “klasai arton” unless it was to do a deal?

By the way Sam if you have pulled yourself away from your multi billion dollar business to read this and want to lunch my email is dukelong@dukelong.com.

Hey, you never know maybe if I build and cultivate and nurture a relationship with Sam………………

Thoughts comments opinions are always encouraged and appreciated.

Duke Long


  • If you’re saying that if someone has access to the data they need then they don’t need a CRE agent, then yes, relationship building is a waste of time with those with that kind of access. But most people don’t have that type of access…yet….

    Most interesting, though, was that your last post got thousands of views – way to go!

  • I think people took what you said the other day and completely misunderstood your point. Well, actually, it’s obvious a lot people did.

    Allow me to boil down what Duke is saying into a phrase you should remind yourself of in this business:

    “He who has the gold…”

    He who has the listing (gold) … is going to get paid.

    He who has the best site criteria (gold) … is going to get paid.

    Sure, relationships help. Relationships help you get in front of the Seller, or turn the Buyer from 5 years ago into a Seller that wants to work with you. But when it comes down to it 99.999% of people in this business give two shits about you when it comes to the gold. If they can work with you – great! If they can’t – oh well, they’ll go the route that pays them.

    • Well! That clears things up! I think what he was saying is that a buyer/tenant doesn’t pick a building on a relationship alone/who has it listed. Fair enough. But if they do use an agent in the site selection process, they’re likely to pick one that they’ve used before assuming they have performed well in the past. And for those who think that relationships don’t count, please come to upstate NY and work at any of the brokerages that compete with the one I work with.

      • I’m not saying relationships are meaningless and neither is Duke. I completely agree that relationships matter especially in smaller markets or when directing a Buyer/site selection. But that relationship, as you stated, is based on performance. Make someone a ton of money & they’ll come back. If they feel that they can make more elsewhere or you’re not pulling weight, you get cut. People won’t put you on the deal for fun unless you were in the same frat (or it’s family) as the guy across the table then maybe you get a deal or two you don’t deserve.

  • I totally agree that brokers spend waaayyy to much time talking about how great they are and not listening to what the client criteria is. Yesterday I searched Loopnet marina brokers for a possible listing in NC. I found a guy in FL and researched his bio, sent him an email with everything on the subject asking for a price opinion and a proposal (ie: You’re Hired) he called me and repeated everything about himself I already knew and then asked me three times to call one of his references…jeez! It’s not about you, it’s not even about you and me…your article is spot on Duke.

  • You are making the assumption that there is perfect information out there that can be “layered on”. The reality is that a broker can help you connect with what is potentially site 6, site 7, and site 8. And this isn’t just hyperbole, because I do it every day.

    Do I agree there are a lot of brokers out there who are relatively useless and/or unqualified….yes, but discounting their usefulness may make for a good blog post to get comments, but that’s about it.

  • A few point. First, perhaps the relationship is with the broker for the tenant not the tenant. This can be very valuable. If you and the tenants broker know and trust each other then you can gain or trade information about how to best structure a deal that both sides can accept. This is much harder to do when you do not even know the tenants hot buttons. The truth is I am a tenant rep. I happen to agree that most LL brokers may as well send their pretty intern to show space because they are a waste of the chemicals used to dry clean their empty suits. But the good ones do create value for the LL. If they have always treated me fairly and are creative and honest often times we are able to find a way to get the second best option to improve it’s position and make the deal.

    To say releationships don’t matter is kind of like saying the big league baseball manager doesnt matter. The players play the game. Like the buildings facts sell the building. But good managers (Guys like Jim Leyland) always seem to find a way to get the best out of their players. Marginal improvements matter. They add up. And figuring out how to give the other guy what he wants at the lowest cost possible is what negotiating is all about. And that is always easier if the other guy feels like he can talk openly and honestly. That only come from knowing and trusting him.