HOW COMMERCIAL REAL ESTATE GIANTS CAN PUT TENANTS’ HARD-EARNED DOLLARS AT RISK

By Gail corder Fischer

In the commercial real estate world, selecting one of the largest firms for space acquisition needs may not be the safest bet for companies that need a true advocate and partner. The “Big Four” – Jones Lang LaSalle, CBRE Group, Inc., Cushman & Wake eld, LLC, and Colliers International – represent both landlords and tenants, creating a conflict of interest that can work to the detriment of tenants. While “Chinese Walls” have been put up to try to avoid this, the basic laws of human behavior render attempts at separation almost impossible. In the end, the tenant risks losing both money and any fair chance at securing the best deal possible. 

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Conflicts of Interest in Commercial Real Estate Transactions:
Who Represents
the Tenant?

This study seeks to identify the potential conflicts of interest inherent in real estate transactions between a commercial tenant and a prospective landlord; evaluate the legal, regulatory, and industry mechanisms in place to protect the interests of commercial tenants through professional representation in these transactions; and where necessary, make recommendations for how such tenant protections might be strengthened to assure an arm’s length transaction between the parties, thereby optimizing the functioning of the commercial real estate marketplace.

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California Real Estate Ruling Shakes Up Dual Agency Norms

FEATURING
GAIL corder FISCHER

“We have known that these conflicting allegiances are an issue,” said Gail Corder Fischer, Executive Vice Chairman of Fischer, a Dallas-based global corporate real estate firm that has represented tenants exclusively for 30 years. “You’d never accept them in any other aspect of your business, so why would you when you are dealing with something as expensive as your lease? When there is no bias, there’s never a question of whether or not a tenant got the best advice and deal.” 

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CRE Industry Weighs Impact of CA Supreme Court Decision

In a decision with potentially far-reaching impact on how commercial and residential real estate brokerages do business, the California Supreme Court on Monday upheld a lower court ruling that a listing broker had a fiduciary responsibility to both the buyer and the seller in a "dual agency" transaction involving the 2007 sale of a Los Angeles home.

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CRE Industry Weighs Impact of CA Supreme Court Decision

They have offically banned the real estate practice of dual agency across the pond. 

This week, the Royal Institution of Chartered Surveyors (RICS), a global real estate accreditation body that certifies property and construction professionals, published a statement containing more stringent conflict-of-interest requirements in advance of standards specific to the United Kingdom. 

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How FASB Real Estate Lease Standards
Expose Conflicts
Of Interest

When the Financial Accounting Standards Board (FASB) issued new guidance on leases, it moved corporate real estate decisions to the desk of the chief financial officer. By doing so, the FASB lease standard raises the stakes for CFOs over the quality of their real estate advice and the conflicts of interest posed by their advisers.

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