Diana Himmelstein, PhD

A tenant representative broker works exclusively on your behalf, helping you find the right space, negotiate the best deal, and avoid costly lease terms. They know the market, understand what landlords are willing to negotiate, and can often uncover opportunities you may not find on your own. Furthermore, even if the tenant negotiates direct, the landlord still pays a full commission to its in-house brokers, they just get to keep the entire fee. Shouldn’t a tenant have an experienced advocate on their side, too?

Similar to a residential purchase where the seller pays the fee to both agents, the Landlord pays a commission to both their leasing agent, and also the tenant representative broker. The full fee gets paid regardless, and if the tenant does not have a broker, the Landlord’s agent will keep the entire fee. Therefore, there is no financial benefit to a tenant for not using representation. The Landlord has someone knowledgeable negotiating on their behalf, shouldn’t the tenant?

Yes. An exclusive representation agreement ensures that we are fully committed to representing you and your best interests throughout the entire process. It allows us to dedicate the time, resources, and expertise needed to identify the right opportunities, negotiate on your behalf, and manage the process from start to finish. It also ensures there is no confusion about who is representing you and that our focus remains solely on your goals.

Usable Square Footage (USF) is the actual space a business physically occupies, while Rentable Square Footage (RSF) is the total space they pay rent on, which includes their proportionate share of the building’s common areas.

The out-of-pocket budget depends heavily on the type of property, the specific use, and the Tenant Improvement (TI) allowance negotiated with the Landlord. For example, a landlord at an industrial property might offer little-to-no TI dollars toward the incoming tenant, however, it’s also possible very little modifications are needed. Landlords of large Class A office or medical buildings may provide extremely generous amounts.

It all depends on how the lease is structured. A tenant who cannot afford the large upfront costs for a buildout may be able to negotiate for a higher rent and/or less abatement in order to get more in TI contribution from the Landlord, or possibly even a turnkey buildout. A tenant representative broker will know what is reasonable to ask for, and what is reasonable to achieve.