There has been recent coverage about potential conflicts of interest in commercial real estate brokerage scenarios and wearing too many hats in the same transaction. Conflicts of interest are present within the commercial real estate sector, and most go unnoticed and are usually well managed by professional firms. However, with the latest lawsuit involving CBRE all over the headlines, it is about time we address this serious matter – publicly.
Recently, a New York-based real estate investor announced they were suing CBRE for more than $11.5M in damages over a Washington D.C private school lease. They are claiming CBRE failed to adequately disclose that it was representing both sides and that it misled the landlord on the tenant's financial health.
Whilst accepting that conflicts of interest can be professionally managed and have been so handled for many years, the push for fee maximisation is increasingly blurring the lines. As a tenant only advisory firm, Franklin Shanks, we have been vocal about the importance of transparently managing conflict for many years. We elect not to represent or seek brokerage fees from Landlords, to ensure our clear alignment with our clients – has the time now come for a more rigid approach, possibly a clear set of industry based rules covering this important issue?
In a world of increasing globalisation and consolidation of real estate service providers, Franklin Shanks has aggressively maintained its independence. We don’t act for landlords, and we don’t manage buildings - we simply represent occupiers all day, every day.
To read the full article please see here: https://tinyurl.com/nap5fcw