Welcome to “Tenant Advisory: What Is Commercial Tenant Representation?”
It’s pretty common for businesses to relocate. Perhaps they are expanding, or maybe their requirements have changed, or it could also be that they intend to target a new market. Whatever the reason is, everyone will agree that finding a suitable office for your business is definitely not an easy feat.
But very few are aware how much better of results you can achieve by having a professional commercial tenant representative on your side.
Although tenant representation is of immense importance, especially when it comes to commercial real estate, it’s surprising that not many people are aware of what it entails. Do you know that office tenant representation can provide you access to more properties?
It can also use market comps and inside knowledge to get you better deal terms that will substantially affect your bottom line? If this is a new concept for you, don’t worry! You are about to find all there’s to know about commercial tenant representation and more.
An Introduction To Tenant Advisory: What Is Commercial Tenant Representation
Let’s face it. Finding a commercial space for your business can be pretty challenging. There are so many factors you have to consider. For one thing, where should you begin your search? And what amenities should you be giving importance to? What about your budget? Yes, the process can be quite overwhelming. Having a professional tenant advisor on your side can help you make the right decision.
So what exactly does commercial tenant representation entail? These agents are licensed real estate brokers who chose to represent only the tenant side of commercial leasing transactions. It is vital for tenants to use their own brokers working exclusively for them, as landlords always have agents representing their side of the transaction.
Tenant representatives draft proposals, detail and explain the financial implications on proposals received, and negotiate rates and concessions on a tenant’s behalf. You can count on your tenant advisor to share details with you that a landlord representative will not. A professional office tenant representative can ensure that you get the best possible deal with terms suited to your requirements at the lowest rate.
What Else Does A Tenant Advisor Do?
The tenant representative broker endeavors to ensure that the transaction between a tenant and a landlord proceeds smoothly, at an arm’s length, and negotiates terms in favor of the tenant. This ensures that companies no longer have to go through the extensive process of finding a commercial space on their own. Commercial tenant representation takes the stress off your shoulders. Here’s what the tenant advisor will help you with:
Work with you to understand your company needs to determine if you should renew your lease or relocate to a new area.
1. Find the right space that will suit your requirements.
2. Negotiate the transaction in order to achieve terms most favorable to you.
3. Address your concerns, queries, and confusions regarding the lease.
A great tenant representative will also continue to check in even after lease signing to help guide you through the space buildout and facilitate communication with ancillary professionals up through your move.
But if they do so much work on your behalf, surely they will cost quite a lot, too. Right? The good news is, this couldn’t be further from reality.
The concept of office tenant representation has been designed for the ease and convenience of the tenants. And this becomes clearer when you realize how the representatives are paid. The representatives are actually paid by the landlord. Yes, they split the commission being paid to the landlord’s agent, being that the landlord is incentivized to fully occupy their space.
Typically, office landlords pay a fee based upon the square footage of the space and the lease term. Similar to being a residential buyer, if you decide to get commercial tenant representation, you won’t have to pay a fee. It’s up to the landlord to take care of it. What more could you want?
How Is Tenant Representation Different Than Other Real Estate Services?
Why can’t you simply have the landlord’s representative assist you with the deal as well? Landlord representatives might seem conciliatory and cordial. But the truth is, their goal is to get the highest price and best terms for the landlord. They are never on your side.
Especially in a lease renewal, it’s possible that the landlord or landlord’s representative will tell you that you don’t need a broker because you are getting a great deal since you’ve been there a while, or because you are friends. It is not a good idea to skip out on using a tenant representative. There is a clear conflict of interest with what you want and what the landlord is trying to achieve. You will inadvertently end up paying more money and signing a lease with less favorable terms in such a situation.
That is not something you have to worry about when you have tenant representation. A tenant representative only broker doesn’t take landlord assignments and are limited to corporate tenants. Hence, they ensure you get the fairest deal available on the market.
Benefits Of Commercial Tenant Representation You Must Know About
Still on the fence? Can’t figure out if you should actually get office tenant representation? Here are some benefits that can tilt the balance for you.
Access to More Properties That Meet Your Needs
Once you begin your search in the market for a suitable commercial space, you will often feel like you have embarked on an impossible mission. It’s pretty common for people to think they have seen everything on the market and can’t find a property that will work for them. This is not necessarily true.
Keep in mind that even the best websites don’t have every property listing. A commercial broker will have access to real estate tools that a non-broker would not. If you don’t utilize the services of a tenant advisor, you will certainly see merely a fraction of the properties on the market.
Furthermore, quite often the best spaces are leased even before they are made available for public viewing. This is another opportunity for your tenant representative to make a difference.
These representatives often have inside network knowledge that help them find additional properties. Hence, if you don’t want to miss out on desirable commercial spaces for your business, you know what to do.
Better Knowledge Of The Market
Think about it. How often do you deal with the local real estate market? Do you really know how the market works, the factors that should be given importance and the up-to-date rental rates and concessions that you can likely achieve?
With commercial tenant representation, you get better local market knowledge. This increases the chances of finding a property that will suit your requirements to perfection. Tenant representatives are fully aware of how the local commercial market works and what terms you might be able to get at that time. Therefore, they can help you find a suitable property with the best possible deal.
Much-Needed Help With Negotiations
Even the most skilled businessmen have found themselves with the shorter end of the stick during real estate negotiations. It’s not easy to untangle the web that landlords and their representatives weave around you. This is especially relevant when reading the lengthy lease, fraught with all kinds of terms and clauses you don’t fully understand.
You might have a hard time figuring out how everything will ultimately impact your finances and operations. Naturally, you wouldn’t want to sign a lease that is not beneficial for your business. Commercial tenant representation can come to your rescue.
Commercial brokers are specialists who are trained to handle every kind of lease negotiation. They will save you time and also ensure that you don’t have to worry about getting the best deal. You can continue focusing on your business while your tenant representative takes care of the leasing process.
Get Optimal Help With Commercial Tenant Representation!
To sum it up, if you want to ensure you get the most suitable commercial space for your business along with favorable lease terms, then good office tenant representation is what you need!
If you have any questions about “Tenant Advisory: What Is Commercial Tenant Representation?”, please leave a comment below.
Also read: Commercial Real Estate and The Markets