What is a development site broker?
A development site broker (or a land broker) is very similar to a commercial real estate broker. Whereas a commercial real estate broker might be a real estate broker that focuses on a specific type of commercial real estate (some examples are multifamily, office buildings, industrial or retail), a development site broker might be more of a generalist, understanding multiple the various property types as well as being versing in the development industry.
A development site broker (or brokerage) differentiates oneself by understanding the land’s highest and best use as well as the zoning, general or specific plan, requirements and restrictions for each parcel of land. Development site brokers may offer other services as well, such as negotiating joint ventures between a land owner and a builder, creating specialized offering memorandums for re-development, offering consulting services or valuing air rights.
Does it matter who I hire?
If you want to know what to expect when a developer buys your property, it does matter who you hire. Below we offer some key insights and differences, but one very common instance that a commercial real estate broker might promise buyers that offer cash, close quickly with fast due diligence time periods, when the opposite is true of a developer. This could cause a Seller to overlook the best buyers for the property while waiting for a false hope to come to the table.
What are some key differences between the two?
A commercial real estate broker.
Not all real estate brokers are equally gifted and knowledgeable in all aspects of commercial real estate. Among brokers of previously improved properties, you may consider specializing based on the property type, such as:
- A broker with knowledge and experience in Single Tenant Net Lease (STNL) for single tenant retail properties. These agents understand lease terms, lengths, credit ratings and other the key value drivers of these properties.
- A broker with knowledge and experience in Multifamily for apartment complex properties. These agents understand amenities, location and other key factors in the specific market, that affect pricing valuations.
- A broker with knowledge and experience in Industrial for warehouses, plants, or facilities. These agents understand environmental and federal, State and City restrictions.
- A broker with knowledge and experience with Office properties. These agents understand the tenant improvements, and lease requirements for businesses.
A development site broker.
While a development site broker might have a previous tenure as one or more of the brokers above, the development site broker also has an esoteric knowledge of development; the specifics of zoning, general and specific city plans, CC&Rs, title considerations to clear before due diligence, contract writing and time periods, and municipal and state restrictions.
Considering the mountain of information a development site broker needs to know, on top of the fundamentals of commercial real estate brokerage, it’s no wonder that these special types of commercial agents like to designate their skill set as being different than other agents.