“It’s All About Relationships In Commercial Real Estate.” That’s Bullshit!

“It’s All About Relationships In Commercial Real Estate.” That’s Bullshit!

Of course its starts with a phone conversation…….

Nurturing working on advancing quality relationships are what EVERYONE in commercial real estate agrees are the MOST important thing that anyone person or brand should be doing. PERIOD !

That’s complete BULLSHIT !

On the phone this week with a 33 year veteran of corporate real estate and the conversation went to relationships. His opinion and mine are that they are worthless. Why is that you ask? Simple.

The site the data and the bottom line are THE important factors. NOT the Broker or Brand!

I personally have witnessed this from both sides and flat out made bank each time.

The site selection basics: What everyone looks for.

1.Highway accessibility.

2.Labor costs.

3.Tax exemptions.

4.Occupancy or construction costs.

5.State and local incentives.

6.Corporate tax rate.

7.Availability of skilled labor.

8.Inbound/outbound shipping costs.

9.Energy availability and costs.

10.Availability of buildings.

The data for the site itself:



3.Demographic Information

4.Comparable Sales Volume.

The bottom line:

1.How many months of operation will it take to gain sales volume increase.

2.How many stores can be built in a specific area?

3.What number of stores need to be built in a single year to hit the foretasted sales number.

4. How will all three numbers effect our stock price.

Nowhere in the above required information is the broker or the brand representing the specific piece of real estate make one little bit of difference.

So maybe the broker is a nice guy and talks golf and picks up the tab. SO WHAT!

The site the data and the bottom line are what determines the deal.

Not The Relationship.

Why are you wasting time?

Maybe you should focus on a better way to present and represent your piece of property.

The decision maker does not care if you have a relationship or not.

So why do you?

Thoughts opinions and comments are always encouraged and appreciated.


Duke Long


  • Duke, very interesting and insightful view. I would state it another way: Business talks; fluff walks.

    By “business” I mean the things that get funded are the things that make the most business sense. I don’t care if it’s a VC, an entrepreneur, or a big blue-chip company… it all comes does to how it helps them accomplish their objectives.

    When I present options to a client, the first thing I state are THEIR BUSINESS objectives, not how cool a package is. It’s what they resonate with and appeals to the ultimate decision maker.

    One area where I would add a caveat: A person’s ability to build relationships — based on shared business objectives — does include soft skills. If a person has all the data, bottom line, etc. and they’re a jerk, it’s highly likely the deal won’t happen. We’re all humans, after all.

    Thanks again for the insight.

  • I was in approx 2 years in CRE when I was contacted by a bank if I would consider in finding a purchaser of a npn for a casino – Aladdin. When a broker, over 40 yrs in business, asked how a small fry like me landed a such a whale of a deal, I responded ” I asked”! (I contacted that bank, and others, if they had any CRE offerings). Motto: “If you don’t ask, you don’t get”

  • Oh Duke, you bomb dropper you… Sure there’s data and location and bottom line. It’s the skilled, knowledgeable broker who analyzes the data, sees where the deal can be made, and brings the parties to agreement that adds value to a transaction and creates or builds a relationship… Why must they be mutually exclusive? IMHO…

  • People do business with those they like and trust – doesn’t it take a relationship to build likeability and trust? I would be interested if you asked that 33 year CRE vet how many repeat transactions he’s completed because of a relationship over the years. I bet some of those repeat transactions fell in his lap because of a relationship.
    OT – the Colts looked good last night.

  • Duke, your post almost points-out exactly why relationships matter so much these days. You do a great job of showing just how complex a real estate decision is. If you do not have someone on your side that you trust, then you will never have the clarity to confidently pull the trigger on an important decision.

  • If you’re saying that you should be able to push your properties on your “relationships” that’s a losing strategy. An agent should find the best property for the client no matter who represents it. Or…if you’re saying relationships don’t count, it depends on how you define a relationship but a golf game or occasional drinks isn’t it. When you’ve been working with someone for years and then they get fired but you still keep in touch even though they can’t make you any money – and then they find a new position and call you to do their work – that’s a relationship.

  • I couldn’t disagree more. Yes there are fundamentals to real estate and nobody is going to go after a losting site because they like the person but how do you get the property in front of the company or developer in the first place? If you are a developer fighting for good sites who brings them to you? Relationships. I think you point of view is very myopic and looks at it from a very narrow perspective. In some cases are you right, sure but in many others you need strong relationships with trust in order to advance transactions.

  • Duke, I understand your point here, but I think you’re looking at relationships from a different angle. The site, data, and bottom line mean nothing if there is no client. Where does that client come from? Relationships. Without an existing relationship or referral there is no client and no transactions.

  • Duke…I finished a 43 year career in economic development in 2008. I worked in Texas, South Carolina, Nevada, Virginia, Oklahoma, North Carolina and finished my career running a regional ED organization in northeast Tennessee and southwest Virginia. From an economic development perspective, I agree with your conclusions on “site selection basics” and “the bottom line”. After a couple of years of retirement I was encouraged to get into the Commercial/Industrial real estate business. This was an opportunity for me to reconnect with the business/corporate community. I did find that previous “relationships” helped me jump-start my new career. Relationships may not matter in the long run, but they matter for someone just starting out.

  • Absolutely right but a good relation with your prospect or client helps to have an edge when he has a different property to refer and your name comes first as you will be very comfortable for him! My experiences…

  • Very cynical view in my opinion. I’ve being doing CRE for 32 years and know very well you can have all the “facts” right and still lose the deal. Your sound as if you have sour grapes over losing a deal!
    Regardless of facts, people make decisions based on more than just facts and figures. There are many reasons why a deal gets made at one location over the other or why one company chooses to do business with one company vs another and one of those key things are “Relationships” whether you choose to believe it or not. At the end of the day almost every decider will consider some advisors local knowledge and opinion and many times it comes down to trust and people will almost always CHOOSE to work with someone they know vs someone they don’t know, especially if their own reputation is being put on the line.

  • Duke

    After over 30 years experience in CRE, I have learned that often it has been my relationships that allowed me to get the attention of those needed to make a deal happen. Relationships have moved my deal up in the queue with very busy professionals that otherwise may not look at the deal in a timely fashion. Also developing relationships gives our clients a sense of confidence that we truly have their best interest at heart, and they are more likely to take our call in the future. We still must give them a deal with their parameters in mind and not try to “snooker” them.

  • I get where this is coming from. But maybe it’s roughly like this … roughly … | Unit of Successful Output (Individual) =

  • You never disappoint me my friend. I’ve seen many crappy properties change brokers continuously. Sellers swap brokerages hoping that fresh meat will be able to reach a successful transaction. If the property is undesirable, it doesn’t matter who’s marketing it in most cases. Bottom line is always the bottom line.

  • I think this is a simplified and one dimensional opinion, when in reality, the deal selection process is much more complex. While I agree that at the end of the day, the bottom line is the most important thing to all businesses, this article is discrediting the value of relationships in the real estate industry. For one, relationships can help with getting your foot in the door, and can also give you the underhand if two sites are of equal quality. Additionally, a positive relationship during one deal can give you more business with that person for years to come. It might not be ALL about relationships, but just like in all business, it can still be very beneficial.

    David Rabinowitz

    Freeman School student