05
Nov

National vs. Niche Brokerages: Which is Better for Multi-Family?

Case Studies

By Kevin Itima

If you’re a real estate investor, I’d encourage you to ask yourself this question: Do you have the right multi-family brokerage? The right commercial real estate brokerage can make your life so much easier, especially when buying and selling multifamily properties. An excellent broker’s insight, analysis, market knowledge, network, and advice are all indispensable. As a middleman between buyers and sellers, a broker can make a real estate investor’s life so much easier.

So, without further ado, we’re here to compare and contrast the different types of brokerages!

Large, National (or Multi-National) Brokerages for Multi-Family Properties

Large multinational brokerages are great for handling large complex sales. They often have a good reputation to back them up and they’re well known across the country—some are even worldwide. However, in general, they’re not so great for smaller transactions.

The generally-accepted definition of a small commercial real estate transaction, or SCRE, is “lower yielding properties between 5-30 units or under a 2-million-dollar sale.” Likewise, a larger transaction would be one over 2 million dollars.

Do you deal with SCREs like most real estate investors, or are you one of the ones dealing with huge, multi-million-dollar sales on a regular basis?

Here are some of the potential downsides of a large multinational brokerage:

  • Many large national brokerages do not play well with other brokers. They already have a huge buyers list, so they rarely place properties on the multiple listing service and rarely network with other brokerage companies.
  • They will absolutely take your business. However, listing agents and principals are needed for large deals, which leave assistants handling anything that falls out of that category. When you have a smaller transaction, your deal might not be handled with the care and expertise it deserves.

 

There’s an alternative to large, multinational brokerages when selling a multi-family property. Let’s discuss local, niche medium-size brokerages.

Medium-Size Brokerages for Multi-Family Properties

A medium-sized local brokerage is great at handling SCREs in your area. They have targeted expertise in this area—it’s what they do all day, every day.

Here are some of the best reasons to choose a medium-size brokerage for multi-family properties:

  • Typically, you’re working directly with listing agent and or principal of brokerage. You’re not working with less-experienced assistants.
  • A smaller niche brokerage is far more likely to work with cooperating brokers.
  • In most cases, a medium-sized brokerage uses local multiple listing service as well as Costar and Loopnet to market properties.
  • With a “boots on the ground” presence, your local niche brokerage can make decisions happen much more quickly than they could happen in a large organization.

 

So, what will you choose? A large, multinational brokerage that specializes in transactions upwards of $2 million or a niche brokerage that specializes in relatively small commercial real estate transactions? The right answer depends on your specific needs—there’s no perfect solution for every real estate investor.

If you’re interested in partnering with a local Chicago brokerage, contact the team at Root Realty today. We’d be glad to help you out!

Keyword: brokerage, multi-family, real estate, multi-family brokerage.