Find out how a tenant representative works in the best interest of business owners who are looking for a commercial real estate lease or purchase.
Tenant representation describes a licensed real estate professional who represents only tenants and users of commercial real estate.
As the client of a tenant representative, you are certain that your agent has no conflicts of interest regarding building listings and landlord contracts. Your agent is on your side and represents only your interests.
Retaining a tenant rep is adding a partner devoted to the success of your company and to an efficient, economical and error-free real estate process.
Tenant Rep Activities
Pre-planning. As part of your professional team, tenant reps work with your architect or space planner, attorney and key executives. They work together to identify the best office, retail or industrial site for your business in regards to
- future growth.
Site Search. Searching for available space includes behind-the-scenes activities to research facilities that may become available. Many space searches include
- contacting all applicable landlords and brokers by phone, fax and email.
- broadcasting the space requirement via various industry and trade media.
- networking with brokers and landlords at trade meetings.
This coverage assures clients the maximum number of location choices. Often the best space is not currently vacant, so there will NOT be a sign in the window. The Tenant Rep’s business is to know of that vacancy before it exists.
Market Research. After completing the search process, the tenant rep performs site inspections, along with market rate and term comparisons. This market research ensures that clients receive the best price and terms possible.
Negotiation. Once the client has decided on one or more facilities, the tenant rep prepares and issues Requests for Proposal (RFPs) to provide to applicable landlords or Letters of Intent (LOIs). The rep analyzes responses and performs and in-depth lease negotiations.
Lease Renewals. Up to a year in advance of your lease expiration, your tenant rep researches the market to determine fair renewal terms, including new landlord upgrades and new lease clause protections, if necessary.
Your Questions Answered
Can’t I do it myself? Yes, of course. However, experience indicates that a commercial real estate transaction entails an average of six to nine months. It takes years of expertise to effectively negotiate complex transactions. Using a tenant rep allows you to focus on your core business.
Do tenant reps work with other real estate companies? Tenant reps gladly work with all other real estate companies and property owners on a daily basis to satisfy your needs.
While it is most common for your tenant rep to contact these companies on your behalf, under certain circumstances it might be appropriate for you to communicate directly. However, it is crucial to tell these companies right away that you are represented by a tenant rep who will be negotiating the transaction on your behalf.
What if I see a good location myself? Simply contact your tenant rep. The rep will research the property as part of the process and tnsure that the best possible terms are negotiated for you if you choose the location. In all likelihood, your tenant rep is already familiar with the building and can provide valuable insight into the assets and drawbacks of the location and landlord.
What will it cost? Normal site selection or acquisition tasks require NO fees from you. Tenant reps are compensated through a share of the leasing or brokerage fee that the landlord pays and budgets for each year.
More importantly, since tenant reps typically succeed in securing better terms for their clients than what the clients would have been able to negotiate themselves, clients who use a tenant rep spend less money in the lease process.
Other services such as market research, consulting, lease analysis and lease termination negotiations are available and typically billed on an hourly or fixed-rate basis.
Is it fair and legal for tenant reps to represent tenants and be paid by the landlord? Yes! Real Estate Commission regulations clearly state that it is both legal and ethical to represent the tenant and be paid by the landlord.
Is an exclusive agreement necessary and in my best interest? Hard-working tenant reps contact all other brokers and owners on your behalf. If other brokers are concurrently making the same contacts, the result will be confusion and a compromise of the tenant rep’s reputation. An experienced tenant rep will not invest the time and resources necessary without the exclusive commitment of the client.
Commercial Real Estate Group of Tucson specializes in representing tenants and corporate users across the United States. For more information call 520-299-3400.