David Cummings on Startups

The Relationship Between Commercial Real Estate and the Media

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David Cummings

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Recently an entrepreneur signed a lease on a new, much larger office and was surprised to learn that the media knew about the deal. Now, the media didn’t learn about the deal the following week or the following day. No, the media was leaked the deal the same day the ink dried. Crazy, right? Why is the commercial real estate industry so eager to share info with the media?

Answer: commercial real estate brokers and the media help each other. The media wants breaking news and compelling stories. Commercial real estate brokers are one of the first people to know if a company is expanding, shrinking, or relocating. Leasing agents at buildings interact with a number of businesses as they evaluate lease options and most don’t have a non-disclosure agreement in place. When an entrepreneur is about to sell his or her company, they have to get the owner of their lease to agree to assign the lease to the new acquirer, and now a commercial real estate broker knows a deal is about to go down and passes it on to the media.

In turn, the media shares information back to the commercial real estate brokers for the same reasons. Brokers want to know about potential deals, especially if they can get a head-start on chasing down a new prospect before the news breaks to the public. Brokers make money when a deal gets done. No deals, no money.

Entrepreneurs would do well to understand the relationship between the commercial real estate industry and the media, especially as their business grows and goes through changes that involve office space.

What else? What are some more thoughts on the relationship between commercial real estate and the media?

Comments

3 responses to “The Relationship Between Commercial Real Estate and the Media”

  1. Paul Mendel Avatar
    Paul Mendel

    I have worked many deals where Non-disclosure docs were executed. On the flip side, I have seen where entrepreneurs leverage the news of the real estate transaction for exposure, thereby increasing awareness of their products or services resulting in increased revenue and market share.

    Reply
  2. Jon Harmer Avatar
    Jon Harmer

    The other way this happens is through public records search – particularly building permits. When you move into an offrice space or expand, you have to get permits for the work, which are public records.
    This just happened to us this week, if you heard the story on the radio or saw it in the Atlanta Business Chronicle about Nexidia growing and adiding jobs, it was because Urvaksh was reading building permits and saw the one our contractor had to file for some new office space we are leasing (because we are growing). He read that, called me up, and got as many details as we were willing to share about it. Old-school reporting, right there.

    Reply
  3. David Rubenstein Avatar
    David Rubenstein

    A professional broker should never distribute a press release or share details of a transaction until they receive full sign-off from their client. But unfortunately there are those in the commercial real estate industry who put self-promotion over their clients’ best interests…they are inclined to ask for forgiveness vs. permission. Companies should think about this when engaging a broker and establish a confidentiality protocol day 1. Along the same vein, companies should be thoughtful selecting their broker in the first place…quite often the broker with the best press coverage is not necessarily the one who most qualified for the assignment or most aligned with the interests of their clients.

    Reply

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