When looking to rent or purchase commercial real estate, you as a business owner might find yourself overwhelmed. You probably have enough on your plate as it is and you might not need the additional stress of office hunting to top off your already busy day. This is where tenant broker representatives come in to help you out. There are a myriad of preconceptions and misconceptions about this profession, so we’re here to set the record straight by explaining this line of work to you in a detailed, easy-to-understand manner.
Here’s everything you need to know about tenant brokers:
The definition of a tenant broker
Tenant representative brokers are real estate professionals who take tenants through the leasing process in its entirety. They assist with everything, from researching the market and locating a suitable property to negotiating the exact terms of the lease with the landlord or office building owner. Tenant representative brokers are also often referred to as corporate services or tenant advisors.
A tenant broker should never be confused with a listing agent. While the former represents the tenant in any leasing transaction, the latter serves the interests of either the landlord or the owner of the building.
Main tasks and responsibilities
A good tenant broker will hold your hand from start to finish when it comes to your leasing agreement. This process can start firstly with assessing your current situation. Your tenant broker will likely want to hear about how satisfied you are with the lease at hand and can help you decide on whether relocating your business or renewing your present lease is better for your business.
If you decide on shopping around for a new place, your tenant broker can do most of the legwork for you. He or she can determine market conditions, look at the available options and handpick and showcase only those commercial properties which suit your requirements regarding location, size, features and amenities.
Once you choose the commercial real estate property most fitting for your business needs, your broker can secure the space for you. Through a letter of intent they will respond to the landlord’s terms by presenting your own conditions and negotiating the details for your benefit. Without a professional broker boasting up-to-date market knowledge, this process can be exhausting and difficult for many business owners.
Although not their main objective, a good tenant broker representative can also advise on the topic of selling or purchasing commercial real estate. They can be a great resource concerning this matter, so don’t hesitate to bring up any concerns you might have with your broker if you’re interested in such transactions.
Reasons to hire a tenant representative
As we mentioned at the beginning of the article, a professional tenant broker representative can make your life easier in many ways. They can do the market research, the legwork and the negotiations of your lease agreement for you. Although all these can potentially be done by yourself as well, you can’t beat the knowledge, the insider information, the connections and the negotiation skills of a tenant broker, who does all these tasks daily and on a professional basis.
Costs and commissions
When it comes to the fees of a tenant broker, we have excellent news for you! It doesn’t cost you a dime to take advantage of this professional service, because all costs are covered by the landlord. Why, you ask? Because a landlord only makes money if his or her commercial real estate property is occupied by tenants. And since the broker helps out in bringing new tenants to the building, his or her fees are paid by the landlord as recognition.
The landlord usually hands out 6% commission to these representatives, with 4% going to the tenant representative and 2% being paid to the landlord’s rep. You might encounter instances where the landlord’s leasing agent will proclaim that you don’t need a tenant broker of your own, since then all commission goes to them. But you should secure your position by having a real estate professional representing you, just as the landlord has a rep of their own.
How to find the best tenant broker
One of the most reliable ways to find a tenant broker who matches your business requirements is by asking around in the industry and getting a few referrals from colleagues and associates. Before you settle on a broker, make sure you inquire about his or her past experiences in negotiating commercial real estate leases. You also need to be guaranteed that the person you will hire has a proven track record with regard to safeguarding tenants.
To quickly summarize, a tenant broker is a well-trained professional who continuously keeps up with market conditions and knows the ins and outs of the industry. Hiring a tenant representative can save you a lot of headaches and can even help you make a good deal for your business. Before you decide on a tenant broker, do a bit of research to make sure that your requirements and needs match his or her skills and knowledge.