Advice for a new project
Hi CRE,

I’m the owner of a firm that provides CPR training courses. We have 11 leased spaces on the east coast ranging from several 1,000 sq foot classroom spaces all the way up to a 7,000 sq ft school.

COVID is certainly impacting how we do business, like most.  We are migrating from a model of doing in-person classes for groups to doing individual skills testing by video conference.

This new model doesn’t require much space. We have setup our virtual testing station in the lobbies of our existing spaces and can easily get away with a 100 sq ft space.

Now that we have these established in our existing locations, we want to expand this model to about 15 additional cities in the next month and add more locations once we have these established.

Our budget is $500-$750 monthly per location for a gross/full service lease.  The most important need is ease of access:  since we won’t have staff physically on site, the location needs to be accessible for students to get into the building between 8am and 8pm every day.  We are using a code lock on our suites which generates an expiring access code (similar to what Airbnb uses) to secure our space. 

Would it be worthwhile to use a broker for this project or try to seek out landlords directly?

Is there a brokerage group that could tackle the entire project for all cities (it’s spread out across several states)?

Is it unusual to enter a lease agreement without physically visiting the property first?  We are hoping to  make a decision through photos and then have our teammates do the install once leased. 

Thanks!!
[{"id": "fqwyn9x", "text": "I interned with a brokerage firm in Texas. Not sure about a brokerage group that could handle your whole project but absolutely use a broker. For tenant representation, typically all of the broker\u2019s commission will be paid by the landlord. Also, the broker is an industry professional who knows how to negotiate your lease, find properties, etc. Using a broker(s) in your case can only benefit you.", "replies": [], "depth": 1}, {"id": "fqwztrk", "text": "If it is virtual, why do you need more locations?", "replies": [{"id": "fqx29d6", "text": "They still need to do a skills test on our equipment. The bulk of the training is online but the skills component is required for certification.", "replies": [], "depth": 2}], "depth": 1}, {"id": "fqx62m8", "text": "You can try a broker in each city. My question is each broker charges lease by % of lease. 5% is common. In this case I can tell you that you seek landlords directly. Most lease rate is probably several times your budget.", "replies": [{"id": "fqx88yb", "text": "Thanks - I was afraid that the 5% commission on a small lease would not be worthwhile to brokers. You think budget is too small?  That\u2019s $60-$75/sq ft for the 100 sq ft spaces. We pay $15-$20 for 1000 sq ft in most locations were in.", "replies": [{"id": "fqxbr7p", "text": "There are industrial condos with a bath, kitchenette, a receptionist. Best is rent a room from the owner.", "replies": [], "depth": 3}, {"id": "fqxluqo", "text": "In a normal world, I think your concern would be valid - most brokers would probably pass on an assignment to find a 100 SF space. It\u2019s even more true if you hired a national firm who co-brokered (split commissions) in each market. There just isn\u2019t any $ in it. Have you used a broker before in any of the markets you have locations?  I\u2019m asking to see if you have an existing relationship with a broker.", "replies": [{"id": "fqz8hbe", "text": "Yes, but they were all local to the location we were researching. I wasn\u2019t sure if there were brokerages that would be able to co-broker the project among multiple agents.", "replies": [{"id": "fr08n7c", "text": "In short, yes there are national firms who have either corporate offices or affiliates/franchisees in most markets.  Your challenge, however, is that there won\u2019t be enough commission for a 100-200 SF lease for a broker to take the assignment, much less co-broker with other brokers in other markets. You could consider an arrangement where you pay a broker a flat fee directly for each lease transaction instead of relying on the traditional landlord-paid broker model.  That\u2019s why I asked about brokers you\u2019ve used before. If there were one or two who understand your company, you could talk to them first and see if they\u2019re affiliated with a firm with offices in other markets. But, I think you\u2019d have to offer them something to make the assignment worth their while, like the flat-fee arrangement.", "replies": [], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "fqx70a8", "text": "Where are you located? If it's in the northeast/east coast seaboard I'd be happy to recommend my personally trusted brokerages.", "replies": [{"id": "fqx8gxd", "text": "All east coast. I\u2019m in SC, we have existing operations in SC GA PA CT MA and ME. New locations will be adding 1-2 in MA, NY, NJ, MD, DC, MD, VA, NC, TN, and another in GA.", "replies": [{"id": "fqya47q", "text": "I see. I can\u2019t help you in a few of those places but I\u2019m happy to reach out to some friends in NY, MA, &amp; DC. I personally work out of western PA/Pittsburgh", "replies": [{"id": "fqz8cmi", "text": "Thanks!  Once we are set on the east coast we will start moving westward, Pittsburgh is early on that list.", "replies": [], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "fqxm5d2", "text": "Slightly tangent, but with things as crazy as they are, you might benefit a bit from waiting for the tsunami of cheap commercial space coming onto the market in the months to come.", "replies": [], "depth": 1}, {"id": "fqyxlhg", "text": "Hi, I\u2019m a realtor in both NY and NJ and can assist with your needs. My info is in my profile/direct message.\n\nAs for scouting for all of your locations, it shouldn\u2019t be an issue provided you know what you\u2019re looking for and communicate clearly.\n\nSince you\u2019re out of state for most of your desired areas, it may help to have your agents do the tour as if they\u2019re showing you the space and provide you with photos and virtually show you the \u201cin-person\u201d view. That\u2019s what I do for my clients who are located elsewhere or for any reason unable to view in a timely fashion.", "replies": [{"id": "fqz8jh7", "text": "Great, that\u2019s what I was hoping to hear regarding touring.", "replies": [], "depth": 2}], "depth": 1}, {"id": "fqzdo7v", "text": "Just invest in online biz dev", "replies": [], "depth": 1}]