Executive Insights – Business Relationships


by Ken Robertson and James Chiboucas

The Relationship Business

Flying back from Texas recently, I struck up a conversation with the gentleman seated next to me who worked for a large aerospace firm. When he asked what business I was in, I told him I was in the relationship business. It couldn’t be more true.

Even though I manage a large portfolio of real estate assets, relationships permeate every aspect of my job and those who work for our company. If it were not for well-forged relationships, KBS undoubtedly would not even be on the map as a recognized national landlord.

The front line is property management. We know our property managers, concierge, and other property-level staff are doing a good job when they know the tenants — when they see them and speak to them in the common areas of the building. This relationship is cultivated every day by being there for the tenants. Positive attitude is key. Having the big picture in mind in terms of always thinking about the tenant as a customer is critical. We never forget that there is a physical element to our product, but that practically speaking, each day we are in the service business.

In the commercial real estate business, tenants know if you are faking it. Trying to pour on the service and “renew” a relationship with a tenant evey time their lease is about to expire … that’s a losing battle. Relationships need to be cultivated every day. When a tenant calls with a problem or a need, to us it’s an opportunity to further strengthen that relationship.

Tenants know if you are faking it.

For new or renewing tenants, we invest a lot of time up front getting to know active tenant-rep brokers. When a tenant representative is bringing a client through one of our buildings, we have already reached out to that professional and spent time understanding his or her business and approach in representing clients. We also develop a good level of trust and strive to understand his or her working style, which makes the process a lot easier and more efficient. It’s a fast-paced business and KBS seeks to make our relationship-building process fun by initiating a lot of broker events so that we can build a rapport with the folks we work with throughout the process.

Building new relationships goes well beyond getting to know the tenant’s representative. We want to know the potential tenant. For new tenant prospects, we pull out the stops by making sure critical team players are at the property showings, including everyone from property management and building engineers to the mayor of the city if necessary. I personally am on hand for many of our tours so that the potential tenant can get to know me as the representative of the owner, and that we are very interested in the tenant’s business. It’s amazing how some owners will send the “keeper of the keys” to tour an important potential tenant — we are the polar opposite.

One example I recall recently was a potential large lease with a Fortune 500 company. We knew the company was having trouble with its existing landlord, and the deal was on and off again. We also knew we were the second choice. Nevertheless, we made the decision to draft leases and assist with investigating municipal incentives on a parallel path. It required KBS to risk some capital, but in the end we created the path of least resistance.  During one of the “off-again” moments with its landlord, the company decided to pick our building. We made it easy by reducing real and perceived barriers.  More importantly, we came across as a landlord that wants to build a relationship with the tenant. That was a key in winning the deal.

The fruit that comes from relationship-building need not benefit only the landlord or the brokers. Tenants can leverage those relationships too. When it comes to lease renewals, often those tenants that have built great relationships with their landlord find it much easier to negotiate terms that benefit their operations. When I stop to consider the tenants we have consistently renewed, you’ll find that the lease  agreement is merely a byproduct of a great relationship.

 

Executive Insights   Business Relationships Ken Robertson website B 300x181
Ken Robertson is the Central Regional President for KBS, overseeing over 12 million square feet.
www.linkedin.com/in/kennethrobertsson

 


More on Business Relationships

Premier Office Magazine asked KBS Vice Chairman and Chief Legal Officer, James Chiboucas about business relationships.

Q: You’ve steered thousands of transactions. Why are relationships so important in this business?

The golden rule, “Do unto others as you would have them do unto you,” is critical to our business. Real estate is a relationship business. If you are in this business for any lengthy period of time, you will cross the paths of most, if not all, of the significant players both as buyers and sellers. The fact that KBS does not ask others to do anything in any capacity that KBS would not be willing to do is the reason that we are one of the preferred business parties of institutional investors, lenders, and the very important brokerage community. The golden rule continues to be part of the KBS culture and a significant reason for its continued success.

 

Executive Insights   Business Relationships Jim Chiboucas website A 240x300
James Chiboucas is Vice Chairman and Chief Legal Officer for KBS.