Putting together industrial deal - broker won’t respond to our proposal?
Hey guys,

I’ve been working with a client for sometime now in the NYC metro area. We’ve zeroed in on a industrial site and have submitted a proposal to the brokers at the space. 

We were about 10% off the asking rent but we’re very articulate that there is play in our numbers and we are looking to start a dialogue together. They agreed. 

The broker was receptive and polite with us. We had a conference call with the landlord and their team going over details of my clients concept and what we would be looking for in a space and how we would utilize it.

The issue is they have not replied to our proposal as they promised. 

Is this indicative that they are still shopping for a better offer? I understand they’re still showing it but I am beginning to get frustrated that they are not formally replying. It’s been nearly two weeks since we submitted and they confirmed receipt. 

They explained to me that while they have reservations on what we sent, they aren’t apprehensive enough to stop discussing and to expect a response soon. The time frame has been pushed out multiple times so far. 

We are still looking at other spaces and am taking care of my client hitting the phones for him. 

Any suggestions on how to handle this? It’s a very tight market for what we’re looking for and I don’t have much leverage on this.
[{"id": "iik0bqz", "text": "It sounds like they have something else cooking or don't like your deal that much based on what they said but two weeks isn't really that long so without your explanation it doesn't seem that farfetched.  It sounds like you have a lot of TI's so they could be pricing that out.", "replies": [{"id": "iik0sxt", "text": "Any ideas on how to kick start something with them at this point? I\u2019d rather not have my guy negotiating against himself. For example, i know my clients financials could be stronger so I\u2019d like to up our security deposit from what we first offered with but I don\u2019t want to throw that out there while getting the cold shoulder and begin negotiations from there. \n\nEarlier, they signaled this was a point of contention for them that they would like more confidence in our ability to pay rent so I hinted that perhaps in a response from them security deposit could be a way to remedy that and they agreed. Now no reply.", "replies": [{"id": "iikewc8", "text": "so don't negotiate against yourself.  \n\nCall their broker and ask what you can do to get this deal done, you'd really like a counter.  Be respectful but the squeaky wheel gets the grease ya know.  If they are waiting on bids they will probably tell you that", "replies": [], "depth": 3}], "depth": 2}, {"id": "iik1eb3", "text": "Hey edit to my reply. We don\u2019t have a tonnn of TIs. Basically one that is widening a loading doc that we said we could do ourselves if need be. \n\nOur use can be dirty if handled improperly which was the main issue and how we would ensure the landlord wouldn\u2019t be stuck with it after we leave or if something happens. We actually agreed that perhaps regular testing or an insurance policy or both would suffice. I just need their exact request to forward to my tenant and get closer to a deal. Feel stuck and frustrated.", "replies": [], "depth": 2}], "depth": 1}, {"id": "iik7hmp", "text": "There is far more demand than supply in most industrial markets right now and with costs rising, LL's not only can get increasingly higher rates, but in some cases (namely newly developed buildings) they need to.  In the markets I am active in, a proposal of 10% below ask would not warrant written counter proposal because it is highly likely that there are multiple other prospects in play for the space.", "replies": [{"id": "iikb4w7", "text": "You\u2019re most likely correct. How would you approach this to continue the deal or try to salvage it? I\u2019d like to tell my client to pony up at his highest bid and then call the broker with that but I fear I\u2019m shootings us in the foot if a response could he around the corner. I don\u2019t want to let it sit too long either", "replies": [{"id": "iikf1d4", "text": "&gt; I\u2019d like to tell my client to pony up at his highest bid and then call the broker\n\ni wouldn't do that I'd get a response first", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "iiknegn", "text": "I would pick up the phone and call the agent to get the scoop. Properties in my market don\u2019t really even sit for two weeks, so if it is still on the listing service then there may be some hair on the deal. \n\nDid you tour the space? Was it empty? Sometimes in a tight market the last guy may be slow leaving and they may be hashing out a renewal. \n\nCall up your other leads, expand your search radius a bit, make sure your clients financials are in order, landlords may be more skittish of no credit tenants with a dirty use.", "replies": [], "depth": 1}, {"id": "iikwe07", "text": "Be patient. They might just be busy", "replies": [{"id": "iil2khb", "text": "Anxious. First big boy deal, you know? It\u2019s a great client that I don\u2019t want to let down, too, we have a great relationship so far.\n\nDon\u2019t want to mess up a great pay check and solid guys business.", "replies": [], "depth": 2}], "depth": 1}, {"id": "iil8cqb", "text": "A lot of people are on vacation right now. Progress has slowed down all over the place.", "replies": [{"id": "iil8srh", "text": "That is probably part. I\u2019m a young buck chasing my first big kill and excited. Thanks for calm message.", "replies": [{"id": "iims3i8", "text": "How many weeks have you been waiting for a response ?", "replies": [], "depth": 3}, {"id": "iin4s2v", "text": "I sent off a proposal on an EARLY extension renewal to ownership group a month ago and they have still yet to respond.  By the way, my client is a fortune 50 company.  I've been doing this for 14 years and every year our deals are being lengthened, really frustrating.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "iilcgpu", "text": "Suggestions on to handle this? Buckle up - you should be hearing this from your broker but I\u2019ll help. \n\n1) LL was nice enough to give you a CC to discuss your terms. \n\n2) The LL is formally responding to you - the silence means not interested - LOI is not binding. They have no further obligation. They spoke w you and your client and you didn\u2019t impress them or they have better options. \n\n3) you said it yourself, the industrial market is experiencing unprecedented rental growth due to the unbelievable demand for industrial space across the country. Industrial is one of the top performing asset classes right now and occupancy levels are at all time highs and you cannot erect industrial space fast enough right now. \n\n4) B/c of 3, why in the fuck would you advocate and advise your client to come in 10% lower than the asking rental rate if you did in fact have room this whole time? Are you seriously trying to \u201cnot negotiate against yourself in this environment\u201d or do you think the LL doesn\u2019t have other options? Your last comment and what you advised your client to do just blow me away. You cannot get any more idiotic than that. \n\n5) You have your answer all along (they have reservations - \u201cnext time, bring me a full ask offer not some BS - if you had room, why didn\u2019t they offer it?\u201d. Now go learn from it and try and make another deal somewhere else. Better hope this LL isn\u2019t a major player in the market bc you might have just black listed yourself to this broker and LL. The broker doesn\u2019t need to deal w low balls and time wasters when there is not enough time in the day to service other business that\u2019s going to get done. \n\n6) good luck and ask a senior what you should do in your next LOI!!!!", "replies": [{"id": "iildnj9", "text": "That\u2019s all very true. I\u2019m in the car right now after the gym so please excuse my short response. I thank you for your words btw\u2026\n\nI explained to my client that we don\u2019t have room to play with and if we want space, we must give all we can right away. He refused to accept that we have to offer more than three months security deposit and/or full asking rent. I\u2019m frustrated with this and now feel a great deal passing away for my young career. I want to salvage this but I\u2019m afraid you\u2019re right and we aborted it before it even began.", "replies": [{"id": "iilg3pc", "text": "This is a tough business. You\u2019re supposed to be the market expert. It\u2019s your job to advise. In order to advise you need to know. I\u2019d maybe start trying to learn the market better. In that scenario I would have swarmed this individual w market data that supported your advice to them and I would have also called them out and told them to expect this exact treatment. \n\nYou\u2019re young it\u2019s not a big deal you learn everyday and you\u2019re gonna fuck up so don\u2019t sweat it. \n\nI\u2019d start learning the market better so that you can begin backing up your advice w data and so that you can present it to them much more confidentantly and assert yourself more. But this comes w time and patience. You advise your clients. They don\u2019t advise you. And when they begin going down a bad path it\u2019s your job to get them on the right path. Also, work out in the morning in this biz, not at night. At night you should be studying the mkt till you fall asleep.", "replies": [], "depth": 3}, {"id": "iilmii1", "text": "Not a great look by low balling 10% then telling you client to send house.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "iilm228", "text": "A few things:\n1. Send an RFP and have the LL offer first.\n2. Think about the bigger picture. You don\u2019t want to give yourself a bad rep bc of a \u201cbig\u201d deal that in 20 years might not seem so big. \n3. Asking rates are usually stale. Especially in NY and presumably an infill location\n4. Sounds like you\u2019ve lost all leverage. Any decent LL knows they\u2019ve already won this negotiation.\n5. No institutional LL is going to take excessive risk on use right now. Be prepared to securitize with a LOC if needed.", "replies": [], "depth": 1}, {"id": "iilmr79", "text": "Have your clients lawyer send a copy of the proposal direct to the landlord and copy the broker and yourself. Have the lawyer explain the situation and ask if and when you will receive a response back if any.", "replies": [{"id": "iiln9r5", "text": "Bold move imo. If I\u2019m the LL I\u2019m canning the deal and moving onto the next one.", "replies": [{"id": "iim6jqu", "text": "Agreed.  Maybe let the other broker know that after two weeks we take your non-response as a response, and realize we need to go up to asking.  If there's not a lot of space like this available chances are other groups are looking at it too.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}]