Finding commercial space for your business is like buying a new car. A bit of a stretch on the analogy, but you know what you want, you know what you need and suddenly you are at the dealership and the sales guy is telling you about all the options, the add-ons, and asking you, “do you want to buy or lease?” “How long do you plan to drive the vehicle?” How many passengers do you need to fit?” “How about extra cargo room?” And you haven’t even started shopping around yet! These days, just kicking the tires and calling it good isn’t going to be enough.
We are not comparing apples to apples here and certainly we all know that the cost of a new car is not comparable to the amount of rent you are going to pay over the term of your lease. But your financial risk in either case is a big concern. Most times, space seekers are looking to save money, opting to negotiate a lease or purchase on their own. But just like at the dealership, there will be hidden costs and fees. Having the inside knowledge and leverage to discuss options with a landlord, can put you in the driver’s seat during negotiations.
Going it alone with a landlord can be a costly mistake for your business. The best strategy is to do your homework and seek advice from a knowledgeable source. This process should begin at least 12-18 months prior to any current lease expirations.
A landlord or his/her rep may appear helpful and reasonable, but they don't have your interests at heart. Don’t get caught up in viewing only the face value of a rent structure. There are numerous ways to build value throughout the life-cycle of a lease by negotiating free rent, tenant improvement and other allowances, flexible expansion and termination rights.
Working with a tenant representative can help you avoid the pot holes in the road. It’s their job to know your business goals and know the current market. A good tenant rep broker is always aware of space options that might not be advertised yet and is well-seasoned at initiating conversations that will work to your advantage. A tenant rep broker’s highest priority is to protect and champion your interests. You can expect a winning scenario because you are being advised with real-time information and seasoned expertise. Ultimately, getting you into space that best fulfills your current and future business needs.
Here are five reasons to work with a tenant rep broker:
1. If everyone’s working for you, no-one’s working for you
With his or her client’s commitment, an expert broker will put in the time and dig under every rock to find the best solution. Many tenants believe they are better off announcing their real estate requirement to multiple brokers, but if a broker doesn’t have a vested relationship, they won’t be as committed to putting in the time and to disclosing potential spaces. Without committing to one expert broker, a tenant will likely only see the low hanging fruit. Find a broker who’s experienced in your area and product type.
2. A tenant rep broker knows the language
Your broker can start conversations with your current landlord, and with other potential landlords, well before lease expiration, without giving away your business status or intentions. They understand the motivations of each landlord. What motivates a small local investor can be very different from what motivates a large institutional owner.
3. A tenant rep broker knows the market
Brokers understand current market trends, drivers and rate structures. They also have existing relationships with many landlords.
4. You’ll have time to focus on your business
With analytical tools and research resources, a tenant rep broker can review demographics, drive times, financial reports and lead you through a structured process, leaving you time to run your business.
5. Beyond the transaction
A forward thinking tenant rep broker also serves as an occupancy advisor and can help maximize your workplace by recommending beneficial amenities and space planning techniques. Utilizing relationships with architects and project managers that are part of a broker’s existing network ensures an integrated team will be working together on your project.
No matter the scope of work, or the challenges that arise, a tenant rep broker has one vision, to deliver the best opportunities to achieve your business goals. The unrivaled expertise you’ll receive is priceless.
Senior Vice President
Colliers International | Minneapolis - St. Paul
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