Using a tenant representation expert when you look for space might be the biggest no-brainer in the commercial real estate industry. If you're considering going on your own for your next lease, here are the top five reasons that you need to get a broker.
Access to Spaces
Between LoopNet, building web sites and all of the other commercial real estate tools out there it might seem like you have access to the whole world of available spaces. While you can see a portion of what is out there for your company, the best spaces usually get snatched up before they make it onto the publicly available systems. Tenant representation brokers frequently have their own industry and internal tools, and the best of them also scour the market to find spaces that aren't being openly promoted.
Market Knowledge
Finding spaces is only part of what goes into tenant representation. Knowing which are good and which aren't is also an important part of the process. Tenant rep brokers are market experts, which means that you can use them to identify not just what you can pay, but what you should be paying. They also know which lease terms are common in their area so that they can help you tell whether or not a proposed offer is reasonable.
Negotiating Assistance
Commercial real estate negotiations can be long and complicated. They typically involve both business points and legal points and, because of the multiple business terms that go into a lease, can make it hard to track how a deal is progressing and who is coming out ahead or behind. Tenant representation specialists make a career out of these negotiations and can manage the process for you.
Conflict-Free Service
While it might seem easier to work with the landlord's representative, it's important to remember who he works for: the landlord. In fact, he is both ethically and legally bound to take care of the landlord's interests at your expense. If the space you're looking at is $42 a foot and a different landlord down the street has a better one at $38, he won't tell you.
When you have a tenant representation broker working with you, he's ethically and legally bound to put you first. Your broker has one job -- to get you the best possible space at the best possible price -- and has no conflicts of interest.
It's Already Paid For
If all of these other benefits aren't enough to convince you to hire a tenant rep, here is one more: it's free. Landlords almost always pay commission for both sides of the transaction. In addition, the commission is structured based on the assumption that there will be two brokers sharing the fee. In other words, the fee for tenant representation is already built into the cost of the space you're looking to lease. Since you've essentially already paid for it, there is no reason to not get the benefit of the service.
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