In Depth: For a Strong Model Family

Be the First to Know

To begin with, it is necessary to learn of the new project as early as possible. A year, or maybe even a couple of year in advance a friend who works as a manager at a development firm may remark casually that his company plans a new construction but dates are yet to be set and the size of the project is quite approximate. If the company has already registered a title to the plot of land, the manager, perhaps, will divulge the address of the building site, or at least will tell you the name of the street.

There are other ways to learn of new projects. The city has a number of favorable sites, which could be allotted for new office development in the outlook. Those are sites where owners are unknown or unfinished developments, idle enterprises, etc. It is worth tracking the fate of each of those plots, for it is quite likely that several developers or raiders are already claiming their rights to them. Once the winner is known plans for further development will be available.

Special attention should be attached to what may be described as external reconnaissance, staying posted on leaks and rumors regarding foreign developers’ plans of entering the Russian market. Their projects are bound to succeed, given Western know-how and years of experience. The one who is the first to learn of the project is more likely to establish a long-term relationship of trust with the developer, get hold of his intentions and persuade him that the project will benefit greatly from participation of a property consultant therein.

Presentations of previous projects, market analysis and, most importantly, meetings with the developer and personal contacts will prove helpful. If later another consultant contacts the developer, the latter will share his impressions of him with the first broker. Although, the opposite is also possible, however objectionable. At any rate, at this stage the competition between consulting companies remains implicit. It is necessary to watch the situation carefully until the developer moves to tackle the brokerage issue in real earnest. Then, the competition becomes overt.

Personal Charm

Personal contact plays a special role in property brokerage. The importance of personal contacts in securing deals and signing contracts is hard to overestimate. Tenants and developers communicate with real managers, not with the brand they represent. Where a good interpersonal relationship is established the client will still maintain ties with the manager even after the latter moves to another property services firm.

The relationship starts, as a rule, with a telephone conversation, during which the agent should try to win his interlocutor’s sympathy from the very beginning. It is obvious that an amicably disposed client is more likely to share extra information and will praise the broker to his seniors. The next stage is a personal meeting which provides even wider opportunities for strengthening the relationship.

A broker who disregards that has virtually no chances to succeed. The further development of relations also requires, in addition to professionalism, interest and attention to details, for example, sending season’s greetings, sharing news, etc. It is in the broker’s highest interest to apply every effort towards building a good relationship. Measures to enhance own image are also useful, for example, by mentioning the name of the manager in the media thus increasing his authority in the eyes of other market operators. Hence, the company’s succeed depends directly on the manager assigned to the concrete project.

Noble Origin

The second factor important for joining a project is the brand, which does play a role in shaping developers’ preferences. In these terms, the market is more or less predictable as major projects by well-known developers are more likely to be secured by international consultants under exclusive or co-exclusive deals.

Developers like to think that an international broker involved in the project is likely to further enhance its image and standing on the market. That is why, no matter how successful domestic consultants are on the Moscow market few are able to break through the glass ceiling. Projects developed by smaller developers or non-real estate companies offer domestic consultants more chances to succeed, as here rivals are on par with one another in the beginning.

Project owners, free of stereotypes of the market, assess companies by the level of brokers’ professionalism, analytical data, their partners and clients. In this case, Russian brokers have a chance to secure a deal on par with their international competitors.

Inveterate Bachelors

Sometimes, consultants are faced with resistance not only on the part of competitors, but also of developers themselves. Project owners who are novices to the office market or are still trapped in their Soviet-era mentality see no need in hiring professional consultants, let alone pay for their services. In this case, a broker will need all his power of persuasion and charisma, if he is to secure access to the project.

But things turn out differently sometimes. Building plots are often allocated under procedures that are far from transparent. That is why it may happen so that a class A office project not far from the Garden Ring is awarded to an obscure firm, whose representatives offer brokers to work for half the usual fee. Favorable location being highly attractive for future tenants, a manager of the consulting company is trying to persuade the owner that projects of such scale are impossible without assistance of professionals who are entitled to a fee in full.

The problem is that some real estate agencies do agree to do their job for half the fee. The landlord signs a deal with such an agency, and afterwards, he will never agree to pay more to anyone. As a result, the problem-ridden project appears on the market.

I Came, I Saw, I Signed

The only thing better than a deal is an exclusive deal. However, developers often believe that several agencies taken together are more likely to realize their project successfully, than one. Such approach spells certain difficulties for consultants, as they are forced to “classify” the project, carefully register all the clients with the owner and watch their further steps. The exclusive deal helps avoid such problems but at the same time exclusive agents bear full responsibility for leasing space. That is why consulting companies are also extremely fastidious and accept exclusive rights only where they are sure of the project’s competitiveness and success. Once the agreement between the broker and the project owner is signed, the struggle for the project ends and the fight for tenants – or, in other words, for the family’s financial stability – begins.

This piece was contributed to Vedomosti by Sergei Kolegov, general director at Prime City Properties. The point of view of the author does not necessarily reflect the position of the editors.