Tuesday, June 7, 2016

The similarities between Shark Tank and commercial real estate

I’ll bet you didn’t think a TV show like Shark Tank had much in common with an industry like commercial real estate.

Below, we go into detail about the similarities between the hit television show and commercial real estate.

(And we’ll even throw in a bonus section about what we can learn from each similarity!)

The Pitch

Every contestant on Shark Tank gives a pitch to the sharks on their product/service.


Commercial real estate brokers, landlords and sellers all make an initial pitch of their property.

Typically, they have to give a short and sweet initial “pitch” of the property’s price, location, amenities, etc. to get a prospective buyer or tenant interested.

Bonus Section: What can we learn?

You know a good pitch on Shark Tank when you see one.  The best are ones that are prepared and know the exact message they want to convey.

Tailor your pitch to your audience.  If you’re selling a distribution center that’s right off a major interchange, you should probably focus on the location.

Practice your pitch.  Be able to explain exactly what is best about your property.

Remember, first impressions really do count!

The Details

You have to know your numbers!

How often do we hear a shark quickly go out on a deal because someone can’t recite their profit margins, net income, etc.


This one is fairly obvious.  You have to know your numbers!

When a person goes on a property tour, you need to be able to recite building details and pricing.  Be prepared to answer square footages of individual offices and/or warehouse bays.  Know ceiling heights, applicable zoning, parking ratios, ingress/egress rights – the list goes on and on.

Bonus Section: What can we learn?

You know how the sharks instantly go out on deals where the entrepreneurs don’t know their numbers?

It’s not necessarily because they don’t trust the entrepreneur’s character.

The problem is twofold:
  1. the sharks feel like the entrepreneur might not have the right priorities– after all, they are investing in a business, not just an idea, and
  2. the sharks need to actually know the answers!
What we can learn as commercial real estate professionals is when a buyer or tenant asks a question, they aren’t going to wait for you to go look up the answer.

You don’t want to be fumbling around and answer every question they ask with “I can find out for you.” 

Study your property ahead of time.

Be prepared to answer all of their questions.

Anticipate what they might ask and your property tour will go much smoother.


After watching a few episodes of Shark Tank, you get a feel for each shark’s specialties.

Daymond is the fashion expert, Lori is the product queen, Mark/Robert are the tech guys, etc.


Most commercial real estate brokers and professionals specialize in one or two subsets of the market.

There are obviously exceptions, but most brokers specialize in one area, like office, retail, industrial or multi-family.

Bonus Section: What can we learn?

There is a reason Mark Cuban is known as the tech guy on Shark Tank.

Anyone with a technology product is always interested in partnering with Mark because they know he can dominate that industry.

It’s the same reason an office occupier would not go to a broker specializing in multi-family sales to find them a new office space to lease.

Stay in your lane.

Find a specialty and stick to it.

Become the “go-to” broker or landlord in your market for a certain sector just like Mark has done for himself on Shark Tank.

Be Creative

Whatever your thoughts are of Kevin O’Leary, you can’t accuse him of not coming up with the most innovative offers on the show.

Typically, the entrepreneurs have a straight offer: Give me $X dollars and I’ll give you Y%.

But it doesn’t have to always be black and white.


Commercial real estate listings are typically originally offered in much the same manner as an offer on Shark Tank.

I’ll give you $X/month to lease your space or I’ll pay you $Y for your property.

There are so many other factors that enter the equation, such as tenant improvement allowance, lease term, warranties and representations of a property, security deposits, etc.

Bonus Section: What can we learn?

Don’t limit yourself to only discussing price.

There are creative ways to solve different issues each party has.

Do what Kevin O’Leary does – he figures out what the entrepreneur actually needs and structures a deal that fulfills that need.

Have a tenant will minimal credit?

Require a larger security deposit that is returned over time if they make timely payments.

Find a way to make your deal work.

The Offer

Our favorite part of Shark Tank is when the sharks ultimately make an offer.  It’s even better when multiple sharks start bidding.


The beginning of the Shark Tank negotiation process is much like the initial proposal in commercial real estate.

One side knows what the other wants for the property and makes an offer.

There can be multiple offers on a property or a prospective tenant can solicit proposals from multiple landlords – just like when multiple sharks bid against one another.

Bonus Section: What can we learn?

On Shark Tank, there is much more transparency than in commercial real estate.  The 5 sharks are aware of what the different sharks are offering (except when 2 sharks get together and start whispering a plan of attack).

However, in commercial real estate, you are not operating with full information.

Don’t assume you are the only party making a proposal or bidding on a property.  Modify your proposals/offers accordingly depending on your needs.

Last but not least: The Negotiating

Sharks often negotiate back and forth with entrepreneurs over the amount of equity (and sometimes over other items like debt servicing, royalty percentages and line of credit amounts).


Obviously, buyers and sellers and tenants and landlords negotiate back and forth as well.

Bonus Section: What can we learn?

Different sharks have different negotiation tactics.  Mark infamously likes to put entrepreneurs on the spot and make a quick decision.

However, Shark Tank is a show that takes place very quickly.

Commercial real estate deals can take weeks or months to put together.

Negotiation tactics probably won’t work and certainly should not be attempted if you can’t afford to live with the consequences.

One question sharks often ask is whether it’s really worth not doing a deal over a couple of percentage points.  (Side note: We always wish an entrepreneur would turn the tables and ask the shark if that’s how they feel, why don’t they part with the extra couple of percentage points.)

In commercial real estate deals, everyone obviously has their bottom dollar and top dollar they are willing to take or pay, respectively.

If someone is within the range of what you would take but it’s not what you think you should take, you need to weigh the pros and cons of a vacant building or a building remaining on the market.

Figure in your ongoing costs and whether it really makes sense to pass on the deal.

We wrote about this at length here.


We can learn a lot from Shark Tank.

You have very seasoned investors who are doling out free business advice every Friday night.

Don’t take it for granted – see how it can apply to your commercial real estate business.

Please feel free to leave comments.  We promise to read them all.  You can also email us with any questions/comments at leasing@seawaybusinesspark.com.  As a reminder, we provide office space for rent and office/warehouse space for rent in Gulfport, Mississippi.  For more information, visit our website at www.seawaybusinesspark.com or call us at (228) 575-7731.