| Exclusive Tenant Broker Representation |
WHY SHOULD YOU HAVE YOUR OWN EXCLUSIVE BROKER?
Your work should be your work. Your business makes money when you are able
to focus on your core business activities. You should devote most of your time and
effort in those areas. In contrast, commercial leasing is a special subset of the real
estate industry that requires special experience and knowledge. Having a tenant rep
broker assist you in leasing is like outsourcing to acquire that expertise. You can
think of your tenant rep as your own Real Estate Department, only without all the
expenses associated with having dedicated personnel performing those functions.
Avoiding conflicts of interest. While it is easy to understand why a tenant should
not count on the landlord's leasing agent to represent the tenant's interests, there is
another conflict that can arise when a business owner uses a "full service" brokerage
firm for tenant representation. For you to get the best possible service, you need
someone who puts your wants, needs, and goals first. Whenever a broker makes a
significant portion of its income from listings, a landlord is always a potential
client...how hard will that broker pursue the tenant's best interests? Some brokerage
firms specialize in "double-ending" leasing deals: one broker gets the listing for a
large office, retail, or industrial space, and then encourages other brokers and
agents in the firm to act as tenant reps and bring in businesses to take the space.
The end result is that the brokerage firm keeps the entire leasing commission, the
landlord gets its building leased, and the business owner is left to wonder how
independent "their guy" really was.
Renewals or relocation. A qualified and experienced tenant rep can help you
evaluate your leasing options, test the marketplace, and work with a current or
prospective landlord to get you a lease on terms that serve your long term business
interests. Too often, landlords take it for granted that their tenants will automatically
sign their "standard form" leases at renewal time. Even if you want to stay in your
current location, your tenant rep can often help you get better terms on your renewal
just by letting your landlord know that you are "keeping your options open" regarding
relocation.
You already subsidize the leasing commission. Nearly all commercial landlords
include the cost of leasing commissions - for new leases and renewals - in their
building expense budgets. Those expenses are recouped as part of your base rent,
whether you work with your own broker or not. Unfortunately, most businesses simply
call the landlord's broker or leasing agent and begin negotiations if the space
appeals to them. THIS IS THE WORST THING A TENANT COULD DO. The leasing
agent represents the landlord, and only the landlord, and the landlord is out to get
the best deal for itself. Get some value out of that leasing commission by having your
own broker. Your tenant rep shares in the leasing commission with the leasing agent
paid by the landlord.
After the lease is signed. A good tenant rep will be there for you during the life of
your lease, to assist in ensuring that your business gets the full benefit of the deal.
Whether it's a referral to a lease audit firm to check your annual expense
reconciliation, or a reminder that your option exercise date is coming up, your tenant
rep should be your ally in helping your business get the most out of your real estate
dollar.
Your work should be your work. Your business makes money when you are able
to focus on your core business activities. You should devote most of your time and
effort in those areas. In contrast, commercial leasing is a special subset of the real
estate industry that requires special experience and knowledge. Having a tenant rep
broker assist you in leasing is like outsourcing to acquire that expertise. You can
think of your tenant rep as your own Real Estate Department, only without all the
expenses associated with having dedicated personnel performing those functions.
Avoiding conflicts of interest. While it is easy to understand why a tenant should
not count on the landlord's leasing agent to represent the tenant's interests, there is
another conflict that can arise when a business owner uses a "full service" brokerage
firm for tenant representation. For you to get the best possible service, you need
someone who puts your wants, needs, and goals first. Whenever a broker makes a
significant portion of its income from listings, a landlord is always a potential
client...how hard will that broker pursue the tenant's best interests? Some brokerage
firms specialize in "double-ending" leasing deals: one broker gets the listing for a
large office, retail, or industrial space, and then encourages other brokers and
agents in the firm to act as tenant reps and bring in businesses to take the space.
The end result is that the brokerage firm keeps the entire leasing commission, the
landlord gets its building leased, and the business owner is left to wonder how
independent "their guy" really was.
Renewals or relocation. A qualified and experienced tenant rep can help you
evaluate your leasing options, test the marketplace, and work with a current or
prospective landlord to get you a lease on terms that serve your long term business
interests. Too often, landlords take it for granted that their tenants will automatically
sign their "standard form" leases at renewal time. Even if you want to stay in your
current location, your tenant rep can often help you get better terms on your renewal
just by letting your landlord know that you are "keeping your options open" regarding
relocation.
You already subsidize the leasing commission. Nearly all commercial landlords
include the cost of leasing commissions - for new leases and renewals - in their
building expense budgets. Those expenses are recouped as part of your base rent,
whether you work with your own broker or not. Unfortunately, most businesses simply
call the landlord's broker or leasing agent and begin negotiations if the space
appeals to them. THIS IS THE WORST THING A TENANT COULD DO. The leasing
agent represents the landlord, and only the landlord, and the landlord is out to get
the best deal for itself. Get some value out of that leasing commission by having your
own broker. Your tenant rep shares in the leasing commission with the leasing agent
paid by the landlord.
After the lease is signed. A good tenant rep will be there for you during the life of
your lease, to assist in ensuring that your business gets the full benefit of the deal.
Whether it's a referral to a lease audit firm to check your annual expense
reconciliation, or a reminder that your option exercise date is coming up, your tenant
rep should be your ally in helping your business get the most out of your real estate
dollar.
Buckingham Commercial Real Estate (415) 310-1632 DRE #01254902 Copyright 2007. Buckingham Commercial Real Estate. All rights reserved. |
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