Tenant Representation FAQ’s
Why does my company need a tenant representative?
Landlords and their representatives negotiate leases on a daily basis, while the typical business tenant does so once every three to five years, if ever. Given those odds, who do you think will come out ahead at the bargaining table?
Engaging a tenant representative ensures that your company’s interests are protected and that you find the best location at the best terms. A tenant representative will not only level the playing field, he or she can even create competition among landlords to win your business.
What about cost: how are tenant representatives compensated?
Your tenant representative’s commission is typically paid by the landlord. Just as the seller pays the realtor commission in residential real estate, the landlord pays the commission in commercial real estate.
If you work exclusively with your landlord’s representative, that individual earns the entire commission. However, if you engage a tenant representative to look out for your interests, he or she will split the commission with the landlord’s representative when the lease is signed.
How does tenant representation work?
Working with a commercial real estate broker as your representative means that your best interests are driving every step, from the facility search to lease negotiation. It also means you and your staff can focus on running and growing the business while your tenant representative handles the relocation research and legwork.
How does my tenant representative discover the best properties?
Your tenant representative will scour the market to turn up any and all properties that meet your requirements, regardless of which brokerage firm has the property listed. In contrast, the landlord’s representative is obligated to promote their clients’ buildings.
Your tenant representative will also know about unadvertised opportunities and creative alternatives that would not occur to someone unfamiliar with the market.
How can my company be sure we’re not overpaying for office space?
Working with a tenant representative is the best way to make sure you’re getting the most competitive lease terms available in your market. For example, part of a tenant representative’s strategy will be to create a bidding war between two or more landlords by sending out a well-crafted Request for Proposal (RFP) to each one. Even if you’re really only interested in one property, your representative will choose one or two similar properties to negotiate against, thus encouraging landlords to compete for your tenancy.
Can a tenant representative help with renewals as well as new leases?
Absolutely. Tenant representatives frequently negotiate renewals on their clients’ behalf. In addition to analyzing the renewal terms, your representative will also show you what else is available on the market to ensure that you’re still getting the best available terms.
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