Nobody knows your business better than you. However, selecting space and negotiating a lease are complex, time-consuming tasks, filled with potential pitfalls. The simple act of retaining a broker will often encourage landlords to offer better terms to the tenant, as representation signals a competitive bidding environment. Tenant representatives eliminate many of the hassles of site selection and negotiation. A tenant representative will prevent potentially disastrous missteps, cut down on real estate expenses, and alert the client to economic opportunities.
Brokers can be classified as “tenant” or “landlord”. Landlord (or leasing) brokers represent space market space on behalf of property owners, so there is a conflict of interest when these brokers represent tenants. Tenants should retain a “tenant broker” who primarily represents tenants. This practice ensures that the broker will remain true to his fiduciary duty.
A qualified, experience tenant representation broker will perform the following services:
- Analyze the tenant’s space needs, with an eye towards opportunities for cost savings
- Investigate all available properties and determine which are the most appropriate for the tenant’s needs and budget
- Create a bidding war among several landlords for the tenant’s business
- Supervise lease negotiations so that the lease meets the tenant’s actual needs and anticipates future needs
- Serve as a buffer between the tenant and landlord, professionally asserting the rights of the tenant while protecting the relationship between tenant and landlord
- Handle the paperwork and other time-consuming details of the lease negotiation
- Settle disputes that arise during negotiations, after negotiations, and after the lease is signed
- Maximize the tenant’s value of ALL lease terms (rent rate, free rent, tenant improvement allowance, renewal provisions, expansion and contraction options, parking rights, signage, etc.)
The key to a successful lease negotiation, whether it’s a renewal or relocation discussion, is to create a competitive bidding environment. Landlords hire professional leasing agents to negotiate the best terms possible to maximize the return on their investment. These leasing agents do not represent the interests of the tenant. To even the playing field, tenants should retain a tenant representation broker to create competition among landlords while maintaining a controlled and organized process. Office tenants save time, money, and stress by seeking the advice of a broker when evaluating renewal and relocation options.
Source: Oak Brook Office Report Blog