One of the biggest challenges that businesses face is making good commercial real estate decisions. Leases and building purchases are long-term decisions, frequently made in an opaque environment where information about the availability of space and its pricing gets obscured. Working with a professional tenant representative helps to level the playing field with landlords, owners, and sellers, letting you make better real estate decisions.
A smart tenant USES a tenant representative. Good tenant reps do four things for you, outlined below, and easily remembered with the mnemonic USES.
UNDERSTAND Your Needs
Long before a tenant representative starts negotiating or even finding space for you, they take a step back and work with you to truly understand what your business needs from its next space. During this first phase, expect your tenant representative to help answer questions like:
- What works about your current spaces? What doesn't work?
- Where do you need to be? Why?
- Within those markets, what areas or submarkets are desirable?
- What kind of space fits your needs-- high rise office, suburban campus, neighborhood office?
- What is your budget?
- What amenities do you need?
- How many people do you need to accommodate, and what types of work do they do? What roles do they play?
- How will you configure your space?
- How will all of these needs change in the near-, mid-, and long-term future?
The answers to these questions give your tenant representative deep insight as to what your business needs. Then, he or she will work with other professionals to build a range of parameters for what would be an ideal space for your needs.
SURVEY the Market(s)
Your tenant representative uses the parameters that got defined in the "understand" phase to do a detailed survey of the market and identify suitable spaces. This process involves searching the open markets, taking advantage of their knowledge of off-market spaces, and surveying the landlord representative community to find additional options.
Based on that survey, your tenant representative will present you with options and set up the process by which you virtually or physically tour potential sites. Usually, the other professionals (like space planners) will also get involved here to make sure that the spaces on your shortlist will really meet your needs. As you finish this part of the process, you can expect to identify a few suitable options that could work for your business.
EXECUTE the Assignment
At this point, your tenant rep begins to facilitate the negotiation with landlords on your behalf. Many reps send out requests for proposals (RFPs) to the potential landlords, getting their offers to convince you to become their tenants. Based on those RFPs, you enter negotiations and go back and forth until you negotiate and sign a letter of intent (LOI) with the property that makes the best offer.
Once you have solidified the business terms of the agreement, your tenant representative works with your legal team to hash out an acceptable lease and get it fully executed. At the same time, they also help spearhead the process of getting the space built out or otherwise prepared for your tenancy. Finally, you move into your new office.
SERVICE.... for the Entire Life Cycle
A good tenant rep's job isn't over when you move into your new space. You can expect to hear from them throughout your tenancy with offers of help for annual CAM audits and reconciliations, market data, and other useful information. As your renewal comes due, your tenant representative will be in touch to make sure that your rights under any renewal options are protected and to help you update your commercial real estate strategy.
A Great Business USES a Tenant Rep
All of these are reasons why most successful businesses leverage the service of tenant representative brokers. Reach out to us today to learn how we can help you increase your ROI on your commercial real estate portfolio.
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