BUSINESS PRACTICES & STRUCTURE
LOOKING THROUGH THE LLC
WhyReal Estate Owners Can No Longer Hide Behind LLCs CORPORATE RECORDKEEPING IS CHANGING, AND CRE PROFESSIONALS MUST FOLLOW.
nections with the players in the market. Even as the digital revolution began to take hold, many states were slow to streamline and digitize corporate records. Those that did place entity information online tended to create un- navigable digital rabbit holes, had poor search capabilities, and often offered disappointing or incomplete results. GOOD NEWS FOR BROKERS, IF THEY’LL LISTEN The past three years have ushered in an industry-wide digital transformation, replete with emerging CRE tech tools that have the power to gather, organize, and supplement government data, and streamline the way in which industry veterans conduct market research. These comprehensive platforms give brokers and investors the unprecedented oppor-
tunity to scrutinize any property, and unearth details like property zoning information, sales history, and debt ma- turity from anywhere in the country. This new technology has, at long last, pierced the LLC and democratized long-coveted property ownership information. The industry-wide impact of this shift cannot be understated. Information that might previously have taken months to un- cover is now instantly accessible. The time and cost savings alone are immense; once a desirable property is identified, a broker or prospective investor can be on the phone with the property’s owner that same day. But many brokers and investors, accus- tomed to navigating an industry riddled with inefficiencies, continue to make tiresome cold calls under the inaccurate as- sumption that such tools are too expensive for their small or independent businesses. This couldn’t be further from the truth.
These platforms are not only affordable, but altogether necessary in gaining and sustaining a competitive edge.
WHAT DOES THAT MEAN FOR LLCS?
Remember, LLCs were created to help investors diversify portfolios, take risks, and separate private and professional finances. The democratization of prop- erty ownership data will have no impact on an LLC’s core purpose, but it does serve to improve the speed at which CRE professionals, building owners, brokers, investors, and otherwise, can find and close their next big deal. •
by Richard Sarkis
he opaque nature of Limited Lia- bility Companies (LLCs) has long frustrated commercial real estate (CRE) brokers and investment outfits looking to make direct contact with property owners, or, at a minimum, find out who currently owns a potential investment. Because it has historically been difficult to identify owners who did not wish to be identified, it has also historically been difficult to move investment op- portunities forward with those owners T
impossible. Before the advent of the internet, an investor might have gone so far as to hire a private investigator to track an owner down. Corporate records were largely stored on microfiche in dusty state capitol building basements: all but inaccessible to the average CRE professional and hugely inconvenient to sift through. Industry pro- fessionals simply accepted the fact that the only way to easily get in touch was through years of carefully cultivated personal con-
even if the deal would have been in both parties’ best interests. That’s finally changing.
THE DEMOCRATIZATION OF DATA IS OPENING UP OWNERSHIP In years past, the process of breaking past the LLC to find commercial prop- erty owners was challenging, time con- suming, and, in many cases, altogether
Richard Sarkis is the CEO and co-found- er or Reonomy, a powerful data engine of over 45 million commercial properties. Learn more at www.reonomy.com.
28 | think realty magazine :: january 2018
thinkrealty . com | 29
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