What Is a Tenant Representation Broker & What Do They Do?
If you haven’t worked with one before, you may have asked yourself: Why use a tenant rep broker at all? There’s already a listing broker for most properties. What’s the point of adding yet another person to the mix?
The fact is that a tenant representation (“tenant rep”) broker is an invaluable resource who will help you navigate all potential scenarios including leasing, buying, or building.
To help you understand why, this post will:
Define what a tenant rep broker is and does.
Explain why you would work with one for your commercial real estate project (office, warehouse, etc. lease).
What is a Tenant Rep Broker?
A tenant rep broker is an expert advisor who represents the tenant’s interests during commercial real estate transactions.
What Does a Tenant Rep Broker Do?
The day-to-day work of a tenant rep broker will vary depending on their client’s current needs. An abbreviated list of typical responsibilities includes:
Reviewing existing leases
Identifying onerous business terms, options, expense exposure, etc.
Workplace Programming - review of existing space usage and needs going forward
Researching and identifying new spaces, both on- and off-market.
Financial analysis and comparison of various occupancy scenarios.
Securing a new lease(renewal or relocation) with favorable terms.
Assisting with selling or purchasing a building.
Maintaining an extensive knowledge of the local commercial real estate market.
Identifying and interviewing vendors as needed to minimize costs and deliver on project goals.
Top 5 Reasons to Hire a Tenant Rep Broker
That’s it. The very basics of what a tenant rep broker is. But that basic definition doesn’t cover exactly what tenant representation is going to do for you.
Since we can’t explore every possible iteration of a commercial real estate tenant here, let’s look at the top 5 reasons to hire a tenant rep broker instead. These will give you an in-depth understanding of just how many ways tenant representation can be impactful for you and your business.
1. Tenant Representation Saves You Time
Very few business owners or executives can afford to focus solely on real estate. Frankly, there are almost always more important, business-critical projects that take priority. Fortunately, a good tenant rep broker can deftly minimize the time executives need to spend on leasing, buying, and building commercial real estate.
Tenant rep brokers know or can quickly source solutions to all manner of complex real estate challenges. They provide critical guidance to keep a project on track. They also ensure any time an executive and their team does spend on real estate is optimized, with no wasted effort.
Another way your tenant rep broker saves you time is through their contacts with architects, general contractors, specialty service providers and other key vendors. Usually, when issues need to be resolved fast, tenants can feel stuck with the landlord or listing broker’s preferred vendors despite those vendors not being the best fit for their needs. A tenant rep broker ensures you will never face this dilemma. They have a roster of vendors or experts in their back pocket, ready to help address any project needs in a timely, efficient, and cost-effective manner. They will be able to:
Bring you multiple vendor options.
Help you interview and consider candidates
Identify gaps and appropriately compare costs.
Move forward with chosen partners.
2. A Tenant Rep Broker is an Advocate Aligned with Your Interests
A tenant rep broker works in 100% alignment with you and your business. You can trust them to stay exclusively guided by your best interests and to put all their effort into achieving the best possible solution for your needs.
This zealous advocacy is especially crucial when dealing with parties who have opposing goals, such as the landlord or the listing broker. Such parties will often work hard to make it seem that they hold your best interests at heart, when in truth they’re incentivized to pursue the highest rates possible from you.
A tenant rep broker is your best defense against these parties. They’ll use all their expertise to keep negotiations going in your favor, with an undivided commitment to your goals.
3. A Tenant Rep Broker is an Expert in Lease Language and Negotiations
Great tenant rep brokers have a deep experience pool to draw from, built from their own work as well as the work of their close colleagues. This knowledge is only achievable through years dedicated to commercial real estate, and it’s invaluable to you as a tenant.
That’s because there’s a vast knowledge gap between landlords/listing agents and the average tenant. This creates a power imbalance that skews heavily in the landlord’s favor. A tenant rep broker upends this balance, using their active market knowledge to benefit the tenant.
Take Total Cost of Occupancy as an example. The term might sound straightforward enough to the layperson’s ear, but scratch the surface and there’s a swarm of niche industry concepts; concessions including improvement packages, free rent, options and rights, expenses and caps, etc. This onerous lease language must be understood to know the real Total Cost of Occupancy and – ultimately – to save a tenant money. But without a tenant rep broker, parsing it all out is akin to another full-time job, and key items will be missed.
With a tenant broker, you have the necessary expertise on your side. Your tenant rep broker will use their personal history and professional network to reference how similar situations to yours were handled and provide real, actionable solutions to problems.
4. Tenant Representation is a Distinct and Proven Process
A dedicated tenant rep broker essentially works as the quarterback of the entire lease/purchase/real estate project. At some point during your process, there will be a tricky question or objective you are looking to achieve. Expertise shows up in your Tenant Rep Broker being able to reference how a similar situation was handled or providing multiple solutions and advice on how to get what is needed to be done. In short questions you never knew would come up with solutions you never could have contemplated.
Before agreeing to work with a particular tenant rep broker, try this little test. Ask them to list areas where a project can get tripped up or where they’ve seen mistakes made in the past. If they can run through a long list of personally witnessed mistakes or missteps, that’s a long list of lessons they’ve learned and can leverage to benefit you.
An experienced tenant rep broker draws on their past to create a clear, proven process. Something along the lines of:
Developing a complete understanding of your needs.
Analyzing your situation as it relates to the present market.
Working to creatively identify and secure spaces on your behalf.
Delivering on your project goals.
Throughout this process, they will keep all stakeholders informed on the timeline and deliver executive-level reports. This way, the final decision-making process can run as seamlessly as possible.
5. A Tenant Rep Broker is on Your Side. The Listing Broker is Not.
Finally, remember that a tenant rep broker and a listing broker are NOT the same thing, despite the similar titles. If the only broker present in the negotiations is the listing broker, then the only interests being fought for are the landlords. That’s because the listing broker has stronger ties to (and larger compensation from) their landlord partners.
Conversely, a tenant rep broker’s livelihood is founded on solid representation of tenants. Their reputation is built through repeat business with satisfied clients and referrals made by those same clients. With their professional lifeblood on the line, you can trust that tenant rep brokers will fight for their client’s best interests and, ultimately, their clients’ satisfaction every step of the way.
You Deserve to Work With a Great Tenant Rep Broker
Sure, you can get a deal done without a tenant rep broker. However, you likely won’t get the best deal done. Meanwhile, be sure to brace yourself for a long, confusing process and a dictionary’s worth of new vocabulary words.
On the other hand, if you want to skip the headaches and be sure you’re getting a great deal on your next commercial real estate leasing, buying, or building project, you’ll want a tenant rep broker on your team.
Finally, if you want a great tenant rep broker, look no further than Modern Commercial Real Estate. We’ll put our years of experience to work saving you time and money and steering you clear of any pitfalls in the process. Feel confident in your next commercial real estate project. Contact us today.