In order to protect themselves, many corporate tenants use the services of a tenant representative. A quality tenant representative, or tenant rep, will walk the user through the process and lend his or her expertise in each stage of the transaction – from planning to unpacking. But finding a good tenant representative can often be a daunting task. As great a surplus of brokers in the markets, there is difficulty in actually finding one that will consistently put your best interests first. Here a few things to keep an eye out for when looking to add a broker to your corporate real estate team:
Conflict of Interest
While some may not mention the fact, many brokers represent both landlords and tenants. The conflict here is clear and should always be avoided. What is not always so obvious are brokers who only represent tenants, but work in firms that also represent landlords.
Although some tenant reps must sign non-disclosure agreements for some of their clients, often the more recognizable ones, a good and experienced tenant representative will have at least a couple happy clients to offer praise. And in this digital age a LinkedIn account is a great place to get a glance at the social proof surrounding (or not surrounding) a candidate for your representation.
Do not use anyone who does not have a solid working knowledge of the market, and access to key information in economic conditions, demographics, and, of course, market rates.
Good tenant representatives understand the economics of the deals you need done. That understanding will be beneficial from the planning of budgets and overall strategy to lease negotiations with savvy property owners.
Bonus: Lease Negotiation
Many companies will look to their corporate attorneys for the negotiation process. The problem here is that in-house counsel are often already occupied in other legal aspects of the business. While they may be able to point out certain language that may not be best for the tenant, they are frequently not keen on commercial real estate lease negotiation best practices.
With that said, stay away from tenant representatives, who do not actively negotiate with landlords. When dealing with landlords, tenant representatives can often find incentives to attract new tenants. These include “rent free” periods, as well as securing tenant improvement allowances and other provisions. If a tenant representative does not negotiate with landlords and simply acts upon the offered price, it might be prudent to look elsewhere.
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