Commercial real estate brokers are licensed professionals who help in facilitating the leasing transaction between a tenant and a landlord. Hiring a tenant rep broker is the best thing to do when starting the search for a new office space. In this article, we are going to explore what a tenant representation broker can do.
1. Protect Your Interest
Many commercial real estate tenants are not aware that tenant rep brokers represent their interests. Before you begin looking at spaces, your tenant rep will spend time with you to understand your business. The tenant rep will look at how it operates today, its history, and where your plans are going in the future. Then, they proceed to work with you on the specifics of your space needs. If you have a detailed space plan, they will use their knowledge to help you refine it, but if you don't, they will guide you as to which spaces are best for your needs.
2. Industry Insights
Many questions and concerns spring up when you are in search of new office space. Tenant rep brokers have industry experience and will enlighten you on areas where you hold leverage as well as areas where the landlord may not budge on negotiations. A tenant rep has many resources and can help you find the best inclusive list of location options present on (or off) the market.
3. Establishing Size Requirement
Sometimes, the hardest thing for a corporate tenant is estimating what size of office to lease. Whether you are a small company or a large one, an established company looking for a new headquarters, finding the right office space is an important step in the leasing process.
Tenant rep brokers can help you estimate the appropriate office size requirement by considering evaluating the desired office layout (private office vs. open floor plate) as well as the growth potential of the company and calculate how many square feet the tenant will likely need.
4. Request for Proposal
Request for Proposal (RFP) is a document that gives the tenant rep and their client a starting point for negotiations. The tenant rep contacts the landlord’s rep to discuss the basic terms that the tenant would like to have in the proposal.
The letter often outlines the rental rate, concessions, and other details related to the available space that they are willing to offer. The landlord does not always send their best offers, and it is up to the tenant rep to negotiate a favorable term for their client.
5. Negotiations
The initial LOI is often rejected by the landlord and the tenant rep works with their client to review the terms and look for areas where compromises can be made. The tenant rep will be in constant touch with the landlord to review deal points, compare offers, and adjust requests based on current market conditions. Some of the reasons why a tenant rep is important during the initial negotiation stage to include:
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Knowledge of the market rates and terms are used in creating leverage
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Simplification of the terms and clauses within the lease for the corporate tenant
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Handling communication with the landlord
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Getting the best lease agreement based on the tenant rep’s knowledge of the market and past experiences.
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