No Office Tenant Rep? Don’t be Stupid!
Jim OsgoodMay 29, 2018
It’s time to make that big move, a larger rented office space. This is good news, because it means your business is growing, but it’s a frightening prospect, to take on that much more commitment and responsibility. You know, when you were purchasing the house that you now live, that the services of a realtor were essential to the successful conclusion of the purchasing process. Believe it or not, the same is true when you are seeking an office for rent, and for many of the same reasons and why you need an office tenant rep to help you.
As you know from your own experience with a residential home purchase, there are realtor commissions built into the sale. The same is true with commercial transactions and tenant representatives, which means that it is always worth your time to engage the services of a tenant rep; those services cost you, the renter, nothing extra. It is FREE
Like a home realtor, an office tenant rep has the experience and knowledge to successfully negotiate the varied and complicated processes involved with successfully researching, negotiating and closing on a lease for commercial office space.
An office tenant rep will be able to answer all your questions and help you understand the consequences of the choices that you will need to make during the process. In addition to the obvious questions, such as location, cost and length of lease, there are a number of other factors which need to be considered when renting office space. A good office tenant rep will help you recognize those issues and make the best decisions for your company’s future success.
As with any negotiation, experience and expertise are key to a successful outcome. Tenant reps negotiate on behalf of hundreds of small business owners such as yourself, meaning that they understand all the critical issues and know how to negotiate on your behalf for the best possible outcome.
What does an Office Tenant Rep do?
Let’s hear it directly from them. The following is from our OfficeFinder LinkedIn group discussion on the most important activities Tenant Reps provide their clients in addition to just finding space:
“I believe the top Time & Money saving services that we provide to clients all revolve around the Transfer of Specialized Knowledge to the client, so that they may make the most informed decision. Up to date market information, understanding the players involved, defining and executing the process required for a successful outcome and most importantly, proactive advocacy, each individually represents significant savings for a client.”
“Avoiding mistakes is very important aspect of why tenant representation is so important for office tenants. We do this every day, just like the landlords and listing agents. Tenants only search and negotiate for office space every few years. Landlords and listing agents love to see tenants coming unrepresented. It makes their business much more profitable than when a tenant is represented by experienced and knowledgeable tenant reps…like the ones we have at OfficeFinder!”
“We provide lease digests and early reminders of important dates i.e. rights and renewal options. We also place these dates on an earlier call up internally so that we remind the tenant that they need to be addressing their real estate needs, even if their intent is to renew. We also assist with renewals. In today’s market the lease signed five years ago is most likely far above today’s market rates.
A 10% discount off of today’s asking rate may sound good however, the market may be giving a 25% discount. Only through the use of their own broker can a tenant gain an accurate opinion of today’s market.
Any business who leases office, retail or industrial space expiring within the next 6 to 18 months should be talking with a broker to represent their interests. This not only pertains to renewals subject to negotiation but also pre-stated rent renewals. This is also a good time to negotiate terms and conditions not included in the original lease.
We have a good system in place and when started at the right time in the renewal process, we have been successful in leveraging our position, procuring rent reductions and changes in other terms beneficial to the tenant. We’ve also been able to facilitate early renewals where the tenant benefits from the negotiated terms and conditions sooner than later.”
“There is absolutley no question as a tenant representative we can all save our clients real money in the transaction and “time” money by not only doing things they would have to do but also the fact we know what to look for in the first place.
We might want to consider the money we can save clients by handling non-transactional issues after the lease is signed. Two examples: 1) client is a 501C-3 teaching museum- eligible for property tax relief. Worked with county and LL-client received over $100K in refunds over 12 years. 2)Client located in Enterprise Zone. Another client/accounting firm specializes in that area of tax. Put them together…anticipate over $500K in saving over next 6 years. There’s a lot more we can do than just focus on the transaction. Just my $.02