If you had a brain tumor, would you see a general practitioner or an orthopedic surgeon? Of course you would not! You would see a neuro-oncologist. The same goes for brokerage, you need a specialist. Many people are unaware of the value in hiring a Tenant Representative specialist when leasing space, and, in particular, when “simply” renewing a lease. There is a huge difference in the outcome of deals negotiated by tenants with no representation, tenants with non-specialist representation, and tenants represented by Tenant Rep specialists.
Here are our top reasons why to hire a Tenant Rep specialist:
#1 – It’s Free. Most every landlord is used to, and expects to pay a Tenant Rep brokerage fee, and if there is no broker representing the tenant, the landlord’s broker, or in house leasing agents (and even the general partner/manager of the ownership), will usually take the fee. So, if you don’t use a broker you are effectively letting the landlord take the fee they were willing to give to your tenant rep, and pay themselves or their agents.
#2 – Conflict of Interest. If a tenant is negotiating directly with the landlord’s agent, that agent has a conflict of interest because they are technically a Dual Agent. Their listing contract is with the landlord, so why would they beat up on their own client for you? Additionally, brokerages that have listings and signs on buildings have fiduciary obligations to their landlord clients, and generally make most of their money on the listing side of the business. Ask yourself, who will they put first?
#3 – Leverage. If a landlord knows you are represented by a Tenant Rep broker, they will be more aggressive in the pursuit of your tenancy. An existing landlord will likely consider any renewing tenant a “Captive Tenant,” until they realize a Tenant Rep has been hired. Tenant Rep brokers develop viable alternatives that turn the captive tenant into a highly sought after commodity for which landlords compete. We use a “Landlord Indifference Analysis” for every deal we do to show the existing landlord how much it will cost if they do not retain a tenant. This helps tilt the playing field in the tenants favor when “renewing”, and also, makes the relocation alternatives more aggressive as well.
#4 – Strategy. Working on a tenant’s behalf for a career puts a Tenant Rep in the boardroom and C-Suite of many types of companies. We think like the companies we represent. Building a strategy and consensus before implementation ensures that the real estate strategy is in sync with the corporate strategy and business plan.
#5 – Process. Tenant Reps don’t market properties for a living. Good Tenant Reps streamline the acquisition process to be efficient and effective for the tenant. It is important that your Tenant Rep be organized and systematic in their approach.
#6 – Additional Services. Some, but not all Tenant Rep brokers offer additional services. Those services including, project management, legal, financial analysis, etc., although also used by landlords, are different in their execution. For example, a large national full service brokerage may have project management as a service, but their professionals are mostly there to service landlord clients and to save the landlords money. Tenant Rep project managers are focused on building environments to the tenant’s specifications while saving tenants money and time.
#7 – Time Savings. The amount of time it takes to develop leverage in the market, analyze proposals, negotiate leases, plan the tenant improvements and manage the construction can be very cumbersome. A Tenant Rep will allow you to focus on the other aspects of your business.
#8 – Information. Having access to availabilities and lease comps are essential to any real estate deal. Although a tenant can drive around and find space on its own, there are many opportunities that are not readily apparent that a Tenant Rep broker will be able to pull into the mix. A common pitfall for a tenant calling off of listing signs is that all the information gathered comes only from listing agents. The Tenant Rep perspective is going to be different, and unbiased. Will listing agents show you everything in the market, or just their listings?
I could keep going, but I am double the length of a normal blog. And realistically, all you need is one of the reasons above…