Tenant Rep Vs. Do-It-Yourself
December 03, 2012
Recently, I was on a flight talking to an owner of a mid-sized company when the conversation turned to corporate real estate. The owner told me that he handled this activity himself and was quite satisfied with the results. I told him I could see why he might like this approach but I was curious about his view of what a tenant representative might add to the mix. I then shared several reasons why he might engage a tenant representation broker next time. They are as follows:
Current, Accurate Market Information – a qualified tenant rep broker has access to a complete database of commercial space in your market, both direct space from a landlord and from companies trying to sub-let space. A tenant can enjoy much more comprehensive analyses while saving time.
Touring Space – it’s tempting to use some kind of virtual tour to get a feel for a potential office location, however, a good tenant rep broker will use his or her knowledge of their client to lead the client to the appropriate locations considering not only the financials but a host of other considerations including responsive property management, security issues, parking distances, traffic patterns, mass transit opportunities, etc.
Financial Modeling – an experienced tenant rep broker should provide real cost savings through revealing, analyzing, and documenting expected cash flows allowing the tenant a peace of mind. Your broker creates a competitive bidding environment between landlords for your credit and ultimate tenancy. And there is typically no cost as your broker splits a fee with the leasing broker, paid by the landlord. If you don’t have your own tenant rep broker the leasing broker will typically pocket the entire fee.
Lease Review – while the client’s attorney will read and provide comments, an experienced tenant rep broker will review their clients’ leases clause-by-clause, word-by-word, no matter how familiar they may be with the process or comfortable their tenants are with the space. Making sure the business terms represented and negotiated are accurately reflected takes an investment of time by your tenant rep broker and the more seasoned he or she is the better the result.
Peace of Mind – a great tenant rep broker will guide you through the leasing process to keep you informed, manage the decision timeline, but not overwhelm you. Getting the most tenant friendly lease agreement, with the most flexibility, at the lowest price is what he or she should provide.
Of course I then shared how Bayshore Partners is the firm to select.
Please call us for assistance on your next real estate initiative.
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