Tenant Representation: No Conflicts of Interest
Whether you’re relocating your business, expanding to another location or finding a home for your start-up, the commercial leasing process can be lengthy and difficult. Having tenant representation can help to simplify the process, but it’s important that you choose the person who will be by your side throughout the process carefully. Many companies make the mistake of thinking that all tenant representation is the same, but that’s simply not the case. These key points will help you understand the differences between tenant representation options.
Tenant Reps and Brokers are Not the Same
Tenant representatives and brokers both assist with the commercial leasing process, but the terms are not interchangeable. Both types of professionals can help you find office, retail, warehousing or industrial space and act as an assistant during the negotiation process, but who these individuals represent differs.
Reps Work for You
Brokers work for both you and the landlord. The key difference between tenant reps and brokers is for whom they work. A tenant rep serves as the advocate for the tenant only. A broker works for both the landlord and the tenant.
Brokers May Tell You That You’ll Save Money if You Skip Using a Rep
Often, brokers who are eager to secure the business of a company will say that using a tenant representative for tenant representation will make the process more costly. This is because the landlord pays the fees of the tenant rep. While at face value this may be true, brokers also are paid a fee. Even if the broker’s fees are lower than the rep’s, tenants may still not see the big savings they are promised.
Brokers Often Have a Conflict of Interest
A broker’s job is to fill the landlord’s units, buildings or offices with tenants. As a result, he or she may recommend properties that are not completely in line with tenants’ needs or that are not priced fairly in respect to current market trends.
Choosing a Rep Frees You of Conflict of Interest Concerns
With a tenant representative, you can feel confident that your interests are being looked out for. Because a tenant rep works solely for you, he or she will be most concerned with finding you the right space for your needs and helping you negotiate the fairest lease possible. That’s why even if a rep’s fees are higher than a broker’s and the landlord folds some of those fees into your rent, you still have the potential to save money when you opt for a rep to serve as your tenant representation.
Doing Background and Reputation Checks is Key
While tenant reps are the smart choice for tenant representation, keep in mind that they’re not all the same. Before you enlist the help of a particular rep, do some Internet research to get a feel for his or her reputation in the area.
AND his or his service and expertise will be FREE to you.