What is a Tenant Rep Broker? Do I need one? Tenant Rep Brokers are licensed commercial real estate professionals that focus exclusively on working with office, retail and industrial property users to help them find the right space, negotiate the best terms, and bring order and efficiency to the process. When you use one, you get an expert in your corner throughout the process and at little or no cost to you.
The key thing about a professional tenant rep is that they work for you. The names that you see on “For Lease” signs are brokers who represent the owner(s) of that specific building. Their job is to represent that owner’s best interest in leasing the vacant space within the building and do it at the best terms for the Landlord. The Tenant Rep broker owes their allegiance to you and is hired to represent your best interest. Let’s take a more detailed look to see what they do and how it can benefit your company.
- Offer expertise in the process. Managing the leasing process is what they do every day. They know how it works and can bring order and efficiency to the process. They level the playing field with the Landlord in that the Landlord knows you have a professional with the knowledge and skill to navigate the process from start to finish and ensure you are getting a fair market deal.
- Saves you time and money. The process of finding a space for your business is extremely time-consuming. Think about all the steps you must go through from start to finish. Going it alone means you or someone on your staff is in the car searching for space, calling multiple brokers to see what space is available, fielding follow-up calls and questions, setting up tours, sending and responding to proposals, searching for vendors, and having to spend a great deal of time on managing all of the details. The Tenant Rep broker does this for you so that you and your staff can focus on your core business.
- Know the ins and outs of the market. Commercial Real Estate does not have an equivalent to the residential MLS service. While LoopNet and Crexi are available as online tools you can use, they are not a complete and accurate repository for all properties available in the market. Tenant Rep Brokers know what space is available today and what space, while not currently on the market today, will be available six months or a year from now. They can also offer insight as to which tenants might be willing to sublease their space if the right replacement tenant were available. They know the price at which deals are being done and concessions, if any, are being offered – not just the asking price the Landlord brokers are quoting.
- Determine your needs and find the best fit. By asking the right questions, they can help you define your space requirements and which building(s) are the best fit for your specific needs. They will help you walk through both the objective and subjective factors that go into selecting the best property to locate your business.
- Compare & contrast lease proposals. It would be nice if all proposals and leases were wrapped in the same size box with the same color bow. Unfortunately, they are not! When identifying potential properties, each building may have vastly different lease structures. Some leases will be full-service leases where the Landlord controls and provides for all the services to the tenants (utilities, janitorial and maintenance) or it may be a net lease where the tenant is responsible for all of the property expenses; and sometimes the lease structure is somewhere between the two. You will need to understand the differences between the lease structures when evaluating rent and who (the landlord or the tenant) pays for the various services and expenses. The Tenant Rep broker routinely prepares this analysis showing the bottom-line total occupancy cost for each proposal.
- Help you navigate complex leases and industry terms. Every industry has its own set of terms and acronyms. Commercial Real Estate is no different. The Tenant Rep broker will help you understand the terminology and what it means to your deal. Today’s leases can range from just a few pages to well over fifty. As such, you will need a good real estate lawyer to advise you. While a Tenant Rep broker is not a lawyer, they do see a lot of leases and can give you good insight as to what clauses and business terms are industry standard and which ones you need to be leery of.
- Provide connections to other industry professionals. Every transaction takes a team. Other professions that are involved in the leasing process include, but are not limited to, contractors, architects and engineers, business furniture and equipment sales, IT companies, movers, lawyers, bankers and countless others. A Tenant Rep broker will have a network of professionals with whom they have worked and can recommend.
- Do all of this at no cost to you. Last, but certainly not the least, the brokerage fee or leasing commission is built into the leasing process. Landlords agree to pay leasing commissions upon signing listing agreements with the Landlord broker. Nearly all listing agreements have a fee built in for the cooperating or tenant broker. When a tenant calls the listing or landlord broker direct, it does not save the landlord money but simply means the listing broker gets both sides of the commission.
Are you getting ready to renew your lease or open a new location? If so, you should take advantage of having an industry professional – who represents you – to assist and guide you through the process to get the right space at the best price and manage the process from start to finish. Their expert knowledge will help you avoid potential pitfalls and make sure you are getting a fair market price. They will create efficiencies and bring value to the process, adding bottom-line dollars and savings to your business. Who would not want that?
This is what we do at Centennial Retail Services. It is what we live and breathe every day. If you are ready to get started or just have a question, we are here to assist.