Finding commercial space for your business is a bit like buying a new car. You think you know what you want and suddenly you’re at the dealership and the sales guy is telling you about all the options and 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?” It’s easy to quickly be overwhelmed by all the decisions you need to make beyond just “kicking the tires.”
Certainly, we all know that the cost of a new car is not comparable to the amount you might pay over the term of your lease. But your financial risk in either case is a big concern. Some space seekers are looking to save money by opting to negotiate a lease or purchase on their own. But just like at the dealership, there will be costs and fees you might not be thinking about. Having the inside knowledge and leverage to confidently discuss your options can put you in the driver’s seat during negotiations.
The best strategy is to do your homework and seek advice from a knowledgeable source — a tenant representation real estate professional. Working with a tenant representative can help you avoid the pot holes in the road. It’s their job to know your business goals, the current market and space options that might not even be advertised yet. A tenant rep broker’s highest priority is to protect and champion your interests, initiating conversations that will work to your advantage and ultimately get you into the space that best fulfills your current and future business needs.
Still not convinced? Here are five reasons to work with a tenant rep broker:
1. If everyone’s working for you, no one’s working for you
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 to uncover potential spaces. Without working with one broker, a tenant will likely only see the low hanging fruit.
But with his or her client’s commitment, an expert broker will dig under every rock to find the best solution. Find a broker who is 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 potential landlords well before lease expiration — without giving away your business status or intentions. They understand the motivations of each landlord, which is important because what motivates a small, local investor can be very different from what motivates a large, institutional owner.
Your broker also understands the nuances that can help you avoid common pitfalls. For example, don’t get caught up in viewing only the face value of a rent structure. There are numerous ways a broker can help you build value throughout the life cycle of a lease by negotiating free rent, tenant improvement and other allowances, flexible expansion and termination rights.
3. A tenant rep broker knows the market
Brokers understand current market trends, drivers and rate structures. They also have relationships with many landlords. Brokers with existing relationships have built a level of trust with the landlords, which means they’ll be more open to negotiations. These relationships are mutually beneficial for all parties involved.
4. You’ll have time to focus on your business
Securing a new lease or buying new space can be a complex and time-consuming process. With analytical tools and research resources, a tenant rep broker can review demographics, drive times, financial reports and more and lead you through a structured process — leaving you time to run your business.
5. A tenant rep broker can help you think 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. Your broker will have a network of relationships with architects and project managers and can help ensure that you have an integrated team that will work together well 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. So, seek out a professional and start early — by beginning the process at least 6–12 months prior to any current lease expirations, you will ensure you have the necessary time to establish a relationship with an expert professional who will guide you through the process to achieving your goals.
Eric Rapp is a Senior Vice President for Colliers in Minneapolis-St. Paul, where specializes in the leasing and sales of office and educational buildings. He immerses himself in all aspects of the representation process and takes pride in negotiating with integrity.