Development is not popular with brokers.
Development requires precision, and most brokers do not want to “get their hands dirty” on development deals, because, let’s face it, development deals are complicated, there’s a lot to get wrong, it takes much longer to make a commission typically and the cycle of selling (where a broker lists a property over and over again throughout years) can be disrupted.
Therefore, many brokers don’t bother trying to understand deals, and they end up just listing properties without knowing the full potential of what can be built there. These brokers, unfortunately, become the biggest mud throwers and in our opinion, time wasters.
We think differently.
We’re actually interested in development and see an opportunity to build a firm around the idea to be specialists in the field. Some may say, there’s more work with each deal and our brokers will make less money, but our intention is to be so good at development that our clients actually want us to represent them – instead of just going through the listing broker. And it’s working – for good reason.
How Development Sight Works
Marcus Lemonis says that businesses typically boil down to 3 things: People, Product, and Process. We agree.
We pride ourselves in quality when it comes to People. We take the time to do things right in brokerage and we like people who feel the same way. We value education, and when a client takes the time to teach us about their industry, and coach us in finding what they need, we put those clients on a pedestal and work for them diligently. Relationships are always key in real estate, we look forward to building them with our clients.
Underwriting development deals is much different than simply evaluating what existing improvements can earn. We not only calculate the highest and best use of a property, we dig deeper into the probable (not always maximum) number of units that will be built on a property, given the FAR, height restrictions, the tier (if there is one), and setbacks. We take time to look at the building envelope to see how much massing can be done on a property considering parking. We understand the difference between construction methods and the relative cost difference. We make sure to know the product we’re selling to the Nth degree, so that our clients can tell the difference in our service.
The process by which we operate is contrary to most brokers. Most brokers want their commission in the shortest timeframe possible – and they conduct the process of brokerage to meet that requirement. While we pay attention to the time/value of money, we also know that development deals are longer due diligence periods and longer escrows. Our process is to not let fees or broker impatience work contrary to the customary practices in the marketplace.
We think cubic, but broker linearly.
You probably won’t find this style of brokerage anywhere else, but if you do, please tell me. We broker deals 1 party at a time! We don’t mass send deals out to multiple parties, we build relationships with clients and send deal they match their preferences, then if that client passes, we send the deal to the next client. What this does is allow us to work with the best, biggest and most serious buyers in the industry and deliver on our promises.