Welcome to the topic “What Is Office Tenant Representation And Why Do You Need It”
Finding a desirable and suitable office space can be an incredibly tough feat. For one thing, you often have limited choices that will work with your size, location and budget. There are also so many additional factors to consider. Then, once you find a space that seems like it might work, you often end up with unfathomable lease terms proposed by the landlord. Luckily, a lot of burden can be eased from your shoulders if you use office tenant representation.
With the right professional guidance, you can save a lot of time and money. Additionally, there will be an increased chance of finding a suitable location with minimal hassles. Yes, once you get a professional Chicago tenant representative on your side, you will no longer have to dedicate your time to searching or negotiations. You can focus on running your business while your office tenant representative will take care of the rest.
What Is Office Tenant Representation?
To put it in simple terms, an office tenant representative refers to a commercial real estate expert who works exclusively for tenants. This includes any business who leases commercial office space.
A real estate broker who does exclusively tenant representation will only work on behalf of business owners, and never represent landlords. This is different from other real estate brokers, such as leasing agents, who represent building owners but often also try and “help” tenants as well. This can be a major conflict of interest. We recommend being wary of Landlord’s agents who make you feel like you are their friend and tell you that you don’t need a broker because they are “giving you a great deal”.
That being said, before you chose to work with a tenant representative, you need to understand how the process works. How can you benefit from tenant representation in 2023?
What Can You Get From Office Tenant Representation?
The basic job of a tenant representative is to facilitate the leasing transaction between a landlord and tenant while safeguarding the interests of the latter. Business owners often struggle to negotiate the best lease terms with their landlords. What they don’t know is that they don’t have to go through the whole process alone. An office tenant representative can be hired to represent them during the process and make everything convenient and smooth.
A tenant representative will analyze your business and office space needs. He or she will conduct an in-depth analysis to figure out your current and future requirements and provide you with detailed information about all potential commercial spaces that can fulfil your needs. The tenant representative’s goal is to get you the right space, for the best lease terms and with the most cost savings.
So what can you hope to get when you hire a professional office tenant representative? Guidance at every step! Here are a few of the instances wherein office tenant representation can be of particularly help.
Figuring Out Whether To Renew The Lease Or Relocate
This is definitely a tough choice for many companies. The decision to relocate a business is never easy, but sometimes it works in your best interests. So how do you decide what will be the best course of action for you? Yes, you can count on your office tenant representative to show you the way.
Typically, if you are happy with the space and it does not look like your requirements will change in the near future, the it might make sense to renew your lease. However even if the plan is to stay and renew, a good tenant broker will advise that regardless, you “shop around” a bit, to build leverage. If you see a few comparable spaces in other buildings, get proposals and negotiate for better terms, then you can bring those proposals back to your current building and see if they can match or beat those terms.
Even if the market rental rates have gone up since you first signed your lease, matching terms such as tenant improvement allowance, for example, should provide you with funds that could be converted into a lower rental rate or a few months’ more of free rent. Alternatively, a tenant improvement allowance could at least be used for some fresh paint and carpet to spruce up your old space.
If your landlord is rigid or unwilling to be flexible in lease terms, or, if you have new office requirements that no longer make sense with your current building, then it might be time to move to a new office space. The first thing a tenant representative will want to do is sit down with you to get a better understanding of your new requirements, whether it be a change in size, office layout, location, or building amenities.
Sometimes as businesses grow they realize they want a different caliber of building to impress their clientele, or different location to be closer to their employees’ homes, or perhaps proximity to public transportation. Sometimes as businesses grow, it simply makes more sense economically to relocate to another building where a landlord might offer a greater incentive package rather than doing an expansion within their current space or even moving to a different space within their current building.
Throughout these discussions, your tenant representative will explore quite a lot of relevant factors while considering which commercial spaces might be suitable for your business needs. He or she will run surveys on their property software, and send inquiries out through their broker networks.
Once your broker has presented you with options and you have narrowed down some spaces to tour, your broker will take you to tour various spaces that should, at least on paper, nicely fit with your desired requirements. Therefore, ultimately, when it’s time for site visits, you can be assured that the commercial spaces you see are the best ones available on the market.
Approaching The Landlord And Finalizing The Deal
When you find a commercial space that seems like it will work well for your business, the next step is to approach the Landlord and hope that the lease terms they agree to will accomplish the same. Your office tenant representative will of course lead the charge with this too. He or she will send a Request for Proposal to the Landlord’s agent, and often have some conversations to get a feel for where you might be able to end up on various terms.
Remember, the initial proposal is not a binding contract and merely marks the start of negotiations. The landlord will spell out his rental rate, operating expenses, offer for abatement and tenant improvement, as well as other details such as renewals, or termination rights, etc.
During each round of proposals, your tenant representative will extrapolate the terms into a spreadsheet that details the financial representations of each term and how they shift throughout each year of the lease.
Your tenant representative will work with you to understand your budget, and help you figure out which terms to push harder on, and which you are likely to get. They will also have frequent conversations with the Landlord’s agent, so each side can understand the others’ goals and motivations and try to come up with an outcome that will work for everyone.
It’s during the negotiations that office tenant representation can really turn things around for you. Remember, a Landlord might tell you that they care about your business, but their goal is to make money.
With professional tenant representation, you can ensure that you do not end up with the shorter end of the stick during the negotiations. Your broker’s expert knowledge of the market will come in handy, and will also help you understand the terminologies within the lease to make sure that you know exactly what you are signing up for.
Why Hire An Office Tenant Representative To Seal The Deal?
Because you now know what exactly you get when you go for office tenant representation in 2023.
Why do you need it?
Well, for one thing, it saves a lot of your time and resources. Searching for an office space can take a lot of time and energy, considering that there’s so much to pay attention to. And if you are spending all of your time trying to find the perfect space and do all of the negotiations yourself, your business can suffer as your focus is shifted. With office tenant representation, this isn’t something you have to worry about. You can work on your business with full attention while your tenant broker takes care of the rest.
With a professional Chicago office representative on your side, you can find the best office space on the market. He or she will ensure that you get a location suited to your business requirements to the last letter. He will not only provide you with a list of potential sites but also help you narrow it down. Additionally, you can be confident of getting the best lease terms beneficial for you if a professional is negotiating on your behalf.
Tenant representation is meant to safeguard your interests. Hence, your broker will ensure that you get multiple viable options that are best for your business. He will use his market knowledge to your advantage. His expertise will help create competition between landlords which will ensure that you get the best possible deal.
Usually, landlords draft lease agreements so they look out for their interests. And it’s quite likely that business owners don’t even understand half of the things they agree to. However, your office tenant representative will ensure that you don’t agree to anything that’s not suitable for your business. He will explain to you the terms and conditions clearly, which will enable you to make an informed decision without any confusion.
Get The Best Deal With Office Tenant Representation
An office tenant representative can definitely help you understand commercial real estate better. You can get the best commercial space with minimal hassles and confusion. Want to know more about how tenant representation works? Don’t hesitate to reach out!
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