7 Things Your Tenant Representative Should Bring to the Table

Starting a relationship with a Tenant Rep is one of the most time-saving and cost-effective decisions you make for your company. Why? Well, Corporate Real Estate is typically the second highest cost a company takes on.  

So, optimizing your CRE with a specialist takes the guesswork out and lands you with a lease that saves your business millions. Sound good? Sit back, relax, and learn the 7 things your Tenant Rep should bring to the table. 

1. Assessment of Your Organization's Needs 

Companies looking for new locations to lease usually have a pretty good idea of what type of space they would like to find. After discussing their needs with a Tenant Rep however, prospective tenants often find that their vision of the ideal lease location may not be the best option for their business.

A Tenant Representative will analyze the space needs of the prospective tenant and help with making important decisions such as: 

• The ideal square footage required for your business
• What layouts would work better for your operations
• The amenities that would be most beneficial for your company

A genuine Tenant Rep should ensure that you don't end up leasing more space than you need and will help you uncover requirements that you weren't aware of. They will even consider your company's potential future needs to ensure that the space will continue to serve you, as the tenant, well in the long term. However, only a True Tenant Rep™, without conflicts, can do this for you. Make sure you’re not working with the landlord’s broker in disguise: What is a True Tenant Rep and What to Avoid.  

2. Market Knowledge 

Seasoned Tenant Reps have a wealth of market and industry knowledge, which is the secret weapon to negotiating favorable lease agreements time and again. They should be well informed in the following: 

• National trends, industry news, and changes in law - successful Tenant Rep brokers keep up with the latest developments in the commercial real estate industry on a national and international level. They follow industry news, and law and regulation changes that may have implications to the local market and leasing trends in general.
  
• Local market demographics, current lease rates, and vacancy trends - a well-informed representative will know the ongoing rental rates and vacancy percentages in different local areas and even for specific buildings. They will be familiar with the demographics of area neighborhoods, local traffic characteristics, and the current and upcoming market inventory.
• Insider info - experienced Tenant Reps are aware of a lot more than you can read in the news or on a commercial real estate listings website. They will be familiar with local landlords' reputation. They will know of unadvertised properties, and undisclosed concessions some landlords are willing to offer. They will know the lease terms of past deals and what similar businesses are paying in rent and what tenant perks they were able to negotiate.
  

3. Access to More Potential Properties 

Some of the best properties in town often get filled with new tenants without ever being advertised as "available for lease." Characteristics such as location, layout, and amenities make such properties highly desirable and because of the demand, property owners often sign a new deal without ever having to market the property. This is especially true for new construction. By the time you see the building break ground and the "for lease" banner go up, the majority of the space is most likely already leased out. 

As we mentioned earlier, experienced Tenant Representatives have insider knowledge of the local commercial real estate market. They network with other CRE professionals and keep up with the lease terms of the more prominent deals signed in the area, and therefore are aware of upcoming vacancies and unadvertised spaces. They know of newly-planned office buildings, shopping centers, and distribution facilities way before construction begins.

When looking to find new office space, there are certain pitfalls you want to avoid. In helping our corporate clients successfully for 3+ decades as True Tenant Reps™, we've developed this free course on how to find your optimal office space.

4. Working Relationships with Landlords 

Just like in any other industry, networking is an invaluable asset in commercial real estate. A seasoned Tenant Rep would most likely already have an established working relationship with the major landlords in the area or even nationally. They may have worked with the property owner on one or more deals in the past, or toured their locations with another client, or at minimum chatted with them at local networking events or national conferences. 

Additionally, the Tenant Rep should likely be familiar with the landlord's reputation. They'll most likely know what concessions each specific property owner is willing to offer and how to lead the negotiation back-and-forth in order to secure the most favorable deal. A Tenant Rep may even recommend avoiding certain properties because of their owner's reputation and thus possibly save you tons of headache down the road.

Learn more about: Why Corporate Tenants Shouldn't Negotiate Without a Representative. 

Rapport cannot be built overnight so if you choose to look for properties on your own, you will miss out on the opportunities that an established broker - landlord relationship may yield in your favor. Even worse, you may end up in a long-term lease with a problematic property owner. 

5. Commercial Real Estate Lease Lingo Translation

Commercial lease agreements are complicated legal documents spanning 80+ pages in some instances. While some sections are straightforward, others are filled with legal terms and industry jargon such as tenant improvements, estoppel agreement, holdover, subordination and attornment, etc. Your in-house attorney or a legal counsel can provide advice or catch potential issues from a legal standpoint, but really what you want is a collaboration between them and your Tenant Rep. An experienced Tenant Rep broker will be able to walk you through the entire agreement, explain each section in plain language, and define any unfamiliar terms for you.

Additionally, they will be able to identify any problematic language, such as an unfavorable lease renewal clause, that may affect you in the future. With this knowledge you can feel confident executing a lease that you clearly understand and agree to. If not, you may fall victim to The Most Dangerous Lease Terms. 

6. Mediator Between You and Landlord 

In essence, the Tenant Representative plays a role similar to a mediator between you and the landlord. The negotiation process can get quite heated in some instances, and it is helpful to have an experienced Tenant Rep to act as a buffer between the two parties. After all, if you do end up signing a lease, you will likely have to continue interacting with the landlord for years to come. Starting off on the wrong foot can sour a professional relationship, so in the interest of maintaining a good partnership with potential landlords it is wise to let the Tenant Rep broker handle all the tough conversations. 

7. Trust  

Most importantly, your relationship with your Tenant Rep should be marked by trust. Unfortunately, an overwhelming majority of brokers out there are not True Tenant Reps™. As mentioned briefly earlier, many brokers belong to networks that represent landlords. So even if your broker claims that they do not work directly with your landlord, their company may handle their interests. For you, the tenant, this can be catastrophic. Wasted money and complicated provisions are in your future if you work one of these conflicted brokers.  

A Tenant Rep relationship should be hallmarked by trust. You need the peace of mind that your broker has your best interests in mind. So, don’t leave it to chance. Work with a Tenant Rep that only represents tenants like the True Tenant Reps™ at iOptimize Realty®. We have 30+ years of experience negotiating solely on behalf of tenants. As such, we have become a trusted leg of the tenant representation industry. Our un-conflicted due diligence regularly saves our corporate clients millions of dollars and months of CRE stress.

Learn why our clients keep coming back and talk to a True Tenant Reps™ at iOptimize Realty® today.