You already pay for tenant representation in your rental rate for a commercial real estate lease. Take advantage of it and you’ll see how much you end up saving.
A rental rate quoted for a space includes
- the marketing costs for any leasing representative
- the developer’s in-house marketing
- compensation for the tenant representative.
If you don’t use your own tenant representative, the landlord’s listing agent—and advocate—gets the entire fee. You paid without having an advocate of your own.
Here are a few examples of how much savings your exclusive tenant representative can win for you:
Improvement allowances. Acting on your own, you may sign an improvement allowance of $35 per square foot, not knowing that the actual market price for such work is $20.
The tenant representative knows the market and would negotiate that any remaining funds from that allowance be applied to lower the rent. For a 100,000-square-foot building, that would mean a savings of $1.5 million.
Economic interest. Many leases pass along to the tenant increases in operating expenses and taxes over a base year.
An experienced tenant representative will address costly issues that include
- identifying the base year
- detailing what’s included in the base year expenses
- whether the landlord can charge items in a different base year from that in which the expenses were incurred.
Beneficial lease terms. Your lease holds you responsible for ongoing maintenance. The tenant representative can assure that ongoing maintenance does not include the repair of existing deficiencies, such as roof problems that may already have plagued the building.
The tenant rep will know how to look at the move-in condition as a benchmark for when your wear and tear commences.
Anticipation of actual needs. A tenant representative can negotiate terms that allow you early access to the space you’ve leased to do your improvements and move in. The lease starts the day you open your doors for business.
Because you still will operate out of your old space during moving and set-up time, this concession prevents you from paying double rent during the overlap period.
Commercial Real Estate Group of Tucson specializes in representing tenants and corporate users across the United States, Latin America, Europe and Asia as a member of ITRA. For more information call 520-299-3400.