Frequently Asked Questions
1. Why do I need [tenant] representation?
For the same reason you would not have one attorney representing both parties in a legal matter. When so much is at stake financially and legally, you shouldn’t have one broker representing both parties in an office lease transaction.
2. Why do we suggest tenant representation?
To avoid any potential conflict of interest. Unlike other real estate companies, tenant representatives never represent landlords, nor do they own or manage property. Consequently, your financial and business goals are all that matter. They are free to aggressively negotiate for savings and lease terms that will provide the greatest benefit to your company.
3. What is the most common mistake a tenant makes when negotiating office space?
The biggest mistake that tenants make is not developing legitimate alternatives to their first choice, whether they are interested in new space or a lease renewal. We often hear, “I don’t want to move, and plan to renew my lease for another term”. Even if you don’t tell your landlord, he will often draw that conclusion from your actions. And once the landlord understands this, a tenant loses his negotiating leverage. Even tenants who have no reason to move must develop alternatives to their current situation. Otherwise they risk spending money needlessly because they have forfeited all leverage in negotiating the terms of their renewal.
4. How is my broker compensated for its services?
You don’t spend a penny to use this service. In most cases, the landlord pays their leasing agent a fee and the leasing agent will share that fee with your representative. In the event you do not have representation, the landlord will pay the entire fee to his leasing agent, but keep in mind where that leasing agent’s loyalties lie when he represents a property. His job and fiduciary obligation are to get the best possible terms for his principal –the landlord. A tenant representative’s job and fiduciary obligation are to get the best possible terms for you.
5. We don’t want to move and intend to renew our lease. Why would we need help?
Landlords hire professional leasing agents to negotiate the highest returns for the investment in their building. If the agent or landlord can sign a tenant at a higher rate, it improves the landlord’s bottom line. The key to a successful renewal negotiation is creating competition between your current landlord and surrounding landlords in the area, while maintaining a controlled and organized process. Tenants need to have an experienced advisor providing the proper market research and negotiating skill that will create leverage for them.