Why the Broker Hub makes the Broker Chain work.
THE CLASSIC BROKER CHAIN
More common in the loan business, multiple layers of brokers (a broker chain) often separate borrowers & lenders. It's the nature of their business. A loan broker brokers knowledge, the information about where and who has money to lend. He/she gets this knowledge by being tuned into other brokers, who are tuned into other brokers, etc. But when the right borrower is connected to the right loan company, often through a chain of brokers, communication and execution is limited by the weakest link which many times renders the whole deal process dysfunctional.
In the commercial real estate business, though, the subject of broker chains implies the links between buyers & sellers. What differs here is that there is a great deal of public information available for properties on the market. A buyer can directly view hundreds of thousands of listings on sites like LoopNet & CoStar, where they can deal directly with a seller or, at best, just one broker. Sellers, though, who are seeking a competitive advantage may hire a broker for their marketing knowledge, who then may seek the help of other brokers, thus forging another chain.
But, when looking for property that is not listed (off-market property), your only choice is a broker, and more often than not, many brokers!
FROM BROKER CHAIN TO BROKER HUB
That's the business that Venture Real Estate Partners is in, brokering off-market real estate properties and investments. We represent both buyers and sellers.... sellers who want autonomy, and buyers who want multiple opportunities from which to choose. Acquiring knowledge about multiple off-market properties makes multiple brokers, not just necessary, but essential. The irony is that when putting together off-market mega-deals with sophisticated buyers & sellers, the broker chain is both a requirement and a curse. Then what makes Venture Real Estate Partners business work so well? A new paradigm, the BROKER HUB.
In our model, no matter how many brokers/intermediaries/finders/consultants are involved, there is only ONE point contact person (THE HUB). The point man facilitates the deal from beginning to end, proactively oversees, steers, arbitrates, and mediates all communications and due diligence between the buyer and seller. Fee Agreements are negotiated and approved by all parties before the Buyer & Seller are introduced. Our point man has over 40 years of commercial real estate experience, and has negotiated literally hundreds of deals. Here is how the HUB MODEL works:
MANAGING THE PROJECT FLOW
This is a diagram of one of our current projects ("the names have been changed to protect the innocent"). It connects a potential buyer, the CEO/Chairman of a Fortune 500 company (who may not be currently looking for property), with a unique opportunity that is not publicly known. What is interesting in this true example is that not only are there multiple brokers involved, but the Buyer to Seller connection includes an introduction to a potential buyer from a Private Equity Fund (who we are working with on another project), and an introduction to this deal's seller from another Property Seller (who we are also working with on another project). Both of these Buyers and Sellers, then, in this example function as intermediaries.
BROKERS ARE YOUR BEST FRIENDS. In the off-market real estate business a well managed network of brokers can turn up gems that even Google couldn't find.