I would say the most misunderstood issue in leasing commercial real estate is brokers and representation. It’s important for occupiers of space to understand representation how a broker can assist in the process as well as the costs associated with using a broker. As the market quickly shifts to a landlord favorable market, tenants need a good representative now more than ever.
Here is my 8 item list as an advocate for tenant representation:
- Your tenant representative is free. This is often misunderstood, but landlord’s budget to pay brokerage fees on every transaction. So in effect the cost of your representation is already built into the asking price. A good broker will also be able to negotiate more favorable economic terms at no out of pocket cost to you.
- Your tenant representative is connected. Not like in the mafia, but he knows people. An unrepresented person might not get a call back as quickly or at all if a landlord does not recognize their name or phone number. Especially if the space is heavily contested as the landlord may not have time to meet so many people, and this is the main reason why brokers can help facilitate your deal. Your tenant representative knows the players in the market, their capabilities, strength of assets, and their reputation. Your rep will also know how to position your bid to position yourself with respect to the landlord’s vision for his property and understand if you should push for a lower rent, free rent, or more contribution. The lowest rental rate is not always the best deal, you need a tenant rep to maximize your outcome.
- Your tenant representative saves you valuable time. Tenants understand their business, not real estate matters. If you look at this from a simple time management strategy it will help you spend time on what make you the most money, your business. Do you understand the application pf percentage rent? Do you understand relocation clauses? SDNA requirements? Your tenant rep does and can explain this all to you in a language you are comfortable with.
- Your tenant representative knows how to find the needles in the haystack. Retail tenants always have specific requirements with regards to size and location for their needs. As the market tightens and selection is low, your tenant rep will know which landlord is aggressively looking for tenants. A good tenant broker can find you off market space by reaching out to his contacts.
- Your tenant representative is an asset at the negotiation table. Landlords are always out for their own best interests. Most landlord have negotiated countless deals, and most tenants only a few. Tenant reps can also serve as a buffer between the landlord and his rep in heated negotiations. Cooler heads equals smarter results.
- Tenant reps are professionals. A good tenant rep has worked countless deal, with varying clauses, all king of conditions and spaces. They know the retail marketplace, and they know how to navigate or side step potential land mines. No two real estate transactions are the same. Not only that but a tenant rep can help create an overall market plan for your expansion, and potentially help relocate you to another location with the same landlord in the event it happens ahead of schedule.
- Your tenant representative can help settle disputes after the lease is inked. While most issues happen prior to signing, sometimes they do happen afterward. Your tenant rep will have notes and remember the landlord position on similar issues that were already agreed to in the lease. A tenant rep can also handle your lease extension or relocation options after the initial term of the lease.
- Your tenant representative can identify opportunities that are not clearly visible. Today many centers do not have clearly visible signed and opportunities may not be advertised as openly since vacancies are so low. In a tight market many transactions are made in “off market” deals and you need a tenant rep to procure your dream site in that kind of market.
Every tenant is entitled to quality representation, and you do not need to be a national chain to get the best. Mom & Pop business, franchisees, local, regional, or national tenants all the same deserve the best!
If you need a good tenant representative, call Sun Realty today to identify your next location, relocation, or expansion!