The team of intelligent counsel will be your best weapon at every turn. The best composition should include a top shelf negotiator/real estate professional. This can be a veteran or young buck, but must have the core competence of solid negotiation skills and mastery of detail management. Seek out a firm which either specializes in tenant representation or has a broker who predominantly represents office tenants in a larger full service brokerage company. Don't be fooled by the "full-service" come-on the large brokerages serve up. You don't need their property management skills, you need a person with a poker face. Interview several, set the criteria as outlined and select one. Your relationship should be reduced to writing in an agreement stating the exact services you demand and the fee structure. The fee ideally should be paid by the landlord wherein you lease space. Don't worry that this some how creates a conflict of interest. Cost of sales is something every building owner knows about, just be sure your agreement clearly states your agent's exclusive representation of your interests. Alternatively, you pay the fee, but your negotiations should include having the landlord reimburse you.For those agents that do not ordinarily represent tenants, but have a solid working knowledge of office leasing, you may need to educate them as to the guerilla process this website preaches and make sure they're completely aware how leverage is created for the TENANT, not the landlord. Having an exclusive agreement with your agent will assure everyone that the fee to him or her will be static; the same from building to building (avoiding any self interest) and it will tell the landlord that you are serious enough about your possible move to have hired an agent. Agents get paid on deals they do; this is their only form of payment.The agreement must demand that any outside compensation to the agent, like a trip as an incentive, must be disclosed. In the tenant hay days, this was quite common for the building owner to entice the agent to "sell" his building. I believe it is best to kick all that kind of stuff out and focus solely on a simple fixed or fixed percentage fee. Your agreement and this process supersedes all of this worry. The agreement with your agent should be submitted to the landlord and agreed to, and attached to the lease as an Exhibit to protect the agent’s fee. Permitting, or insisting that the agent issue a press release to the local news papers will garner both positive press for the agent, but will be noticed by a great many landlords.The landlords making contacting with your team first is an excellent way to increase your options and take advantage of their overtures.
FEES DUE REAL ESTATE BROKER In real estate deals, everything is usually on the table for discussion and negotiation and deals have seen landlords and developers negotiate on every possible economic component in a lease.The rent gets negotiated down, the Tenant Improvement Allowance gets negotiated up, free rent appears like magic, moving expense allowances are offered, parking costs are abated, and existing leases are taken over. Cruises, cars and cash payments have been used as inducements.It’s all just cash. But time and time again, some arrogant landlords and developers declare the fee due the real estate agent is fixed in concrete or as holy a thing as if the shroud of Turin were draped around it. Deals have seen brokers make less on ten and fifteen year leases with larger tenants than they would have if they had made a much smaller five year lease.Deals have seen landlords actually develop proposals where the financial gap in the negotiations between the tenant and landlord coincidently is an amount similar to the real estate brokerage fee; leaving the poor broker to feel as if all this is her fault; or that the tenant will have to increase rent to pay for the fee.Hog wash again. Having a pistol-packing office tenant rep professional by your side for three, six, twelve or eighteen months is wise. These professionals only get paid by what deals they represent, no differently than an insurance agent, they eat what they kill. In some markets where real estate commissions vary wildly, it makes sense that this fee be at least roughly estimated or fixed to assure parity from building to building.
As the tenant, you have every right to make this demand of the deal economics, and to assure your team members are appropriately and adequately compensated for the experience, skill and professionalism they provide you.If the landlord is either too cheap to pay the appropriate fee, or too arrogant, then walk away.If the landlord is shaving cash so close, you probably should consider his financial stability at some risk.And if the landlord is hesitant out of principle or spite, you don’t want him as a landlord.Use a good strong tenant representation agreement with your agent, establish the fee, have this agreement submitted to the landlord and agreed to (AND attached to the lease as an Exhibit to protect your agent), or walk away.There is a new world: The tenant, the cash provider for the landlord, is the engine. The tenant has all the leverage.There is a real joy in simply telling the landlord to go away.If he really wants you as a tenant, he will come back and agree.
The Tenant Rep Agency carefully reviews your needs and will develop the referral to the hand-selected tenant representative in the city you need. Tenant Rep Agency will monitor your representation to assure your needs are met, and evlauate the representation afterward.
Sophisticated and knowledgeable landlords recognize that the thorough and methodical process of a good tenant rep will expedite well-qualified tenants for their buildings. According to an article in the Journal of Property Management...
"Many property owners have discovered that negotiating with a tenant rep broker...has actually streamlined and accelerated the lease negotiation process"
