Who Really Represents the Tenant?
First, We’ll Tell You Who Doesn’t
In a legal proceeding, you would never hire the same attorney or law firm as your opponent. If you were being audited by the IRS, you would certainly want to have your own accountant represent you. In both cases, you would hire experts to ensure your interests are well protected.
Yet in commercial real estate, many business owners looking for office or retail space rely solely on the landlord’s representative without retaining their own advisor. They do not realize the enormous impact their own advocate can have on their bottom line… and in most cases, it doesn’t cost the tenant a dime.
Conflict of Interest
There is an inherent conflict of interest when a tenant negotiates directly with building owners or the leasing agents they’ve hired. The primary goal of both parties is to get the highest lease rate and landlord-centric lease terms. Tenants are looking for the exact opposite - low lease rate and tenant-centric lease terms.
Dual representation (one broker representing both the owner and tenant) is very common in today’s commercial real estate practice. See www.tenrea.com/education for some great examples. Dual representation is not dishonest or illegal as long as it’s disclosed upfront to both parties. It is however, imperative that tenants understand the significant risk of this type of arrangement and are aware of the pitfalls.
The bottom line is that no matter how much you trust the landlord or how tempting it is to deal directly with the listing agent, it would be foolhardy to enter into negotiations without leverage and market knowledge (what comparable space is available, rental rates, etc.). Unfortunately, it could take you countless hours, if not weeks to accumulate this type of information. And you will still leave money on the table by not being familiar with the nuances of lease negotiations.
Let an Expert Help You
Tenants have a huge advantage if they employ the professional services of a tenant representative. However, not all tenant representatives are created equal. Most commercial real estate brokers take listings from owners and derive the majority of their income from related activities. These full-service firms may have a separate department for tenants and buyers but it is difficult to ascertain where their true allegiance lies. Although their “tenant representatives” might claim objectivity and that they will not steer you to one of their listings, you cannot be sure. The only way to be assured you are getting an unbiased opinion is to hire a firm that does not take listings.
Tenant Real Estate Advisors specializes exclusively in tenant representation; we do not own property, nor do we represent building owners in listings or lease negotiations. We have a deep market knowledge that translates to leverage at the negotiating table and we have helped save our clients thousands of dollars over their lease terms by uncovering the “hidden money” in leases.
Saving Tenants Significant Dollars and Time
Some of the benefits of using a tenant representative include savings on monthly rent, increases in improvement allowances, limits on expenses passed through to the tenant, and the coordination of the space planning and construction process. The result is a significant savings of both time and money with the leased space being tailored to the exact needs of your company.
Perhaps the most attractive benefit is knowing that Tenant Real Estate Advisors is working diligently on your behalf to find the right space and negotiate a favorable lease while you continue to focus on your core business. We are committed to making your lease negotiations as trouble free as possible. On top of that, our fees are paid by the landlord, equating to a free and valuable service for you, the tenant.
In summary, no business should act without professional support on something as vital and expensive as their office or retail space. Whether you are looking for new space or you plan to renegotiate your current lease, give Tenant Real Estate Advisors a call today.
If you have questions about your exact situation, we are happy to answer questions or help you find the right professional that can. Give us a call anytime @ (719) 634-9000.
866.799.8732 | 719.634.9000 (o) | 719.448.0500 (f)