When considering hiring a specialist to help you navigate the real estate goals of your business, it’s important to understand the difference between what you get when you turn to a business consultant versus a real estate broker. The word consultant can easily be misleading and tricky. Consulting is the right motive, but a real estate consultant is the right specialist. There are several big differences between a general business consultant and a real estate consultant. For example, a tenant representation broker, who is hired by the client, has focused expertise in the commercial real estate space. With a business consultant, they are often able to help you make decisions about the big picture regarding the kind of real estate needs your business has. They are able to research the market and get a general understanding of the trends for leasing prices at the time. However, a real estate broker will have detailed and specific market knowledge of the rental rates and other concessions offered by specific landlords at the time. Not only will they have existing relationships with the landlords themselves, but they are actively negotiating other leases in the same buildings and areas that you are looking for. Therefore, they have concrete comparable offers to use as leverage.
Another important difference between a business consultant and a real estate broker is payment. The client pays the business consultant for their services. Alternatively, the landlord is responsible for compensating a tenant representation broker at the time at which they also compensate their own landlord representative. Therefore, the client reaps the benefits of having an experienced and knowledgeable negotiator working on their behalf and doesn’t owe their broker anything.
When it comes to dealing with your second largest expense, like an office lease, it is critical to reach out and recruit the person with the most information and skills in negotiating leases. Below, we highlight a comparative scenario of renegotiating a lease using a business consultant versus a real estate consultant.
Example 1: Renegotiating a lease using a business consultant
The business consultant speaks directly to the landlord and asks what his best offer is. The business consultant then shares this information with the client who then calculates their best offer. The business consultant, who has no outside sources to compare prices of office leases, negotiates a price with the landlord. The landlord, aware that the business consultant has no outside information, has the upper hand. On top of this, the business consultant charges the client who was left with poor results.
Example 2: Renegotiating a lease using a real estate consultant
Clients first: The real estate consultant first asks the client what their intentions are.
The more information and knowledge the negotiator has, the more skilled they are. The real estate consultant researches other buildings in the area, compares lease prices, and shares this with the client. The client then has the choice and upper hand to renegotiate the lease with the landlord or change offices. The landlord is now aware that he/she has competition and is more willing to seriously renegotiate the lease. In addition, with a real estate consultant, the client owes nothing! The landlord compensates the broker. The business consultant may have results, but unsatisfying results. If you want the best results, think competition, think high savings, and get a real estate consultant.