Dec 18th, 2019, By

Landlord Advantage: No Tenant Rep on Your Side

Are you looking for new commercial space? Want to be the best loved tenant on the market? It's easy! Just do everything yourself. There's nothing that makes landlords happier than working with tenants who don't have representation. That's how your landlord gets the best deal possible for him or herself. And if you're working on your own, here are the gifts that you'll be giving your landlord.

 

1) Too Much Rent

Do you know how much rent you should be paying? Are you sure? Should it be $42.50 or 43.25 a foot? What about the difference between a space on the third and thirty-third floor? Your landlord knows what he or she wants to charge, and if you're on your own, you won't know what the right price is in the market. And if you think you do, keep this in mind. The prices that you see in "for rent" ads aren't the prices that landlords actually charge -- they're the prices that they ask for. It's almost impossible to know what spaces actually cost -- unless you're the one in the market doing the deals.

 

2) Too Few Concessions

Did you know that most landlords usually offer some free money up front to induce tenants to choose their building. Usually, the free money comes in two forms. Free rent is a typical concession. This means that you get to have the space and not pay for it for a period of time (usually measured in months)! The other free money that you can get is landlord support for tenant improvements. You build out your space, and you send some or all of the bills to your landlord for him or her to pay. If you don't know what's reasonable in your market, you'll probably leave money in the table -- and in your landlord's bank account.

 

3) Big Rent Increases

When you really think about it, it's reasonable to have your rent go up a little bit from time to time. After all, the cost of running a building goes up and inflation is a reality. But how much of a rent increase is reasonable? Should it be 3.5 percent per year? Or should it track the consumer price index (CPI)? Again, if you aren't sure, your landlord will be.

 

4) Creative Building Rules

Did you know that most leases have lists of building rules buried in them? And you might find all sorts of requirements in them. It's not uncommon for buildings to ban pets, which means that "bring your dog to work on Friday" won't be an option any more. You could end up having to pay extra for elevator or HVAC service after 6 pm. And bringing in Chipotle for office lunches on Monday could be against the rules if you're required to use the building's catering service. You know. The one that charges $13 for a tuna sandwich. On stale white bread. Rules can be changed and broken, but you might not know that if you are working alone.

 

5) Less Risk (More For You)

Are you a small business? You've probably set up a structure to separate yourself from your business's liabilities. But if you go to your landlord by yourself, he or she won't care. It's very common for building owners to ask business owners to personally guarantee their leases, so that your assets will be on the hook for your business' rent liabilities.

 

6) Silence. Sweet Silence.

Finally, if you're on your own and you call a busy landlord to ask about a space, they just might not take or return your call. They want to fill the space and they know that they can usually get a good deal by working with an unrepresented tenant. But they also know that it's easier to work with a professional on the other side of the table, so many landlords won't take unrepresented people seriously.

 

With all of this in mind, there is a very easy way to ensure that you're getting a fair shake in the lease negotiation process. Find a tenant rep broker, and work with him or her. Your rep will get you the attention you need and get you the right deal for you and for your market instead of the right deal for your landlord.

 

Check out these other articles:

Six Must-Have Office Amenities

What is a Modified Gross Lease?

Commercial Lease Renewal 101

 

Subscribe to our blog for more CRE tips!
Subscribe Now

 

« 7 Signs It's Time For a New Office Space 7 Commercial Lease Renewal Tips »