So at this point, you may understand what a tenant representative is, but you’re still wondering if hiring one would be right for you. There are a lot of elements to consider when entering a real estate transaction.
Prioritizing can quickly become overwhelming when you don’t know where to begin.
When your first step is working with a tenant rep firm, it will help you avoid unnecessary stress, expenditures, and wasted time.
Sure, we are tenant reps. We are not looking to convert anyone; we just know what we have to offer. If we can’t help you, we want you to know now. We are in the business of saving time, money, and hassle- not creating it.
Read on to learn more of the benefits of utilizing a tenant representative service to decide if working with one is right for you.
1. Tenant Representatives Only Represent You
When looking for representation in your real estate dealings, it is vital to ensure that they are concerned with your interests alone. Many brokers work both ends of a deal by representing tenants and landlords alike.
Tenant representatives traditionally receive a fee not from you but from the landlord. Landlords are usually happy to pay the fee of a tenant rep because they bring them credit-worthy tenants to fill their vacant spaces.
When a broker represents both you and the landlord, they have less incentive to negotiate costs down for you. They know what each party is willing to pay and are therefore in an advantageous position to secure a deal that directly benefits them.
As a result, you may overpay for a property that may or may not fit your company's needs.
In addition, when it comes to showing you available properties, these brokers might prioritize properties in which they also already represent the landlord.
Therefore, you may only be shown a small percentage of the available properties on the market.
In order to check all your boxes, you will find that unbiased representation is critical. That is where tenant representatives come into play. They only work for you. They secure you the most sensible deal while reducing any potential risks associated with your commercial real estate transaction.
Your rep will help you avoid costly surprises or clauses, break down confusing jargon and processes, and walk you through the elements of negotiation.
2. Careful Attention to Your Needs
The most valuable aspect of tenant representatives is the relationship they provide. Forging this partnership will ensure that your needs will be carefully assessed throughout every stage of the process. In addition, through working with you and your team, they can personally understand not only your asking points, but other factors you may have not considered.
For example, if you are looking for warehouse space in upstate New York, it may make more financial sense to jump over the border into Connecticut. While geographically, the plots are still similar, the final costs could mean a world of difference. The experience and market research reps come equipped with allow them to see the bigger picture with your real estate needs.
You can closely work with professionals who essentially become another wing of your company. Through strategic deliberation, they will find the best course of action. Whether you are looking to expand or downsize your existing space, your tenant rep will analyze every option on the market to find you the perfect fit.
Tenant representatives don’t only understand the market, but they have an intimate knowledge of how it has changed in recent years. If you are not familiar with the field, you may not know just how equipped your tenancy is while entering negotiations.
Your corporate real estate portfolio is important and requires close attention from a party that understands you and your company. Working with a tenant rep ensures that your needs are met as they strategically work with you to determine your best fit.
3. Cost Savings
At this point, you may be wondering how much these services are going to put you back. Such skilled representation is surely going to cost you an arm and a leg, right?
Tenant representatives come at no cost to you. Their fee is paid by the landlord, who is usually pleased to fill any vacant properties they own. Not only are you not incurring any out-of-pocket costs, but you will also be saving money when working with a tenant rep. They know how the market functions and the elements of negotiation that could save you big.
Through understanding landlords and how they run deals, your representative is prepared at every stage to help you cut costs. This also means getting the best lease terms for you following the negotiation process.
Whether it is free parking, a negotiated increase in tenant improvement dollars, or a period of free rent- you may be surprised to see how much your tenant rep will save you in the long run. Of course, the savings that they find are not confined to those brief examples. By increasing competition among landlords' brokers, they will drive down costs wherever possible.
The Benefits lie in the Service They Provide
To fully grasp the perks of using a tenant representative, it helps to understand the process they follow. The comprehensive care they provide to their clients throughout the real estate process is what allows them to stand out against other brokers. In a typical transaction, you can expect your tenant rep to complete the following:
Discuss your property needs
Complete market research to find any and all suitable sites
Prepare a comprehensive and succinct market survey
Review the sites with you in a time-efficient manner
Set up property tours
Work with you in deciding the first cuts and which properties you want to submit a Request for Proposal (RFP)
Process and summarize the landlord’s response to the RFP
Provide a sophisticated analysis of all financial terms and break down the Key Performance Indicators (KPIs), including average rent per usable foot and the net present value
Seek out extra, hidden costs from landlords
Examine the true cost of each prospective site through unbiased analysis, taking into account common KSDs (Key Site Drivers)
Compare how each prospective site met your criteria, not just the lowest price alternative
Drive down the number of possible sites to a handful of properties through deliberating with you and your team
Negotiate with the representation for each site, juxtaposing them against each other so they bid for your valuable tenancy
Provide a summary of negotiated terms following back and forth arbitration with landlords
Help you choose between the finalist sites
Prepare a LOI (Letter of Intent) for your approval and submission to the finalist landlord
Check for any “gotcha” clauses in your leasing agreement hidden by the landlord
Collaborate with your counsel to finalize the lease terms
Provide ongoing support through your signing and lease commencement date
While the tenant representative is familiar with this process, and some aspects may only take them a matter of days, it would truly be a hair-pulling process for most tenants, especially those with other things on their plates.
Where to go From Here
Now that you have a good grasp of the benefits of a tenant representative, you probably have a better idea of why you should work with one. Their ability to guide you throughout the real estate process promises that your interests are protected as they secure the most skillful deal on your behalf.
Talk to a True Tenant Rep™ at iOptimize Realty® to learn how you can plan for your CRE future today.