We’ve had several clients move office locations in the past year. Some were growing, some were shrinking, some went through the leasing process alone, others hired tenant reps. Many business owners lease new office space on their own because after all, they’re business owners and know how to negotiate better than anyone….right? The fact is, most business owners don’t know enough about leasing or leases. You’re not buying a car or piece office equipment, you’re entering into a 30-35 page contract with rules, regulations and often times “boiler plate” language. When a Property Manager looks at you and says “This is a standard boiler plate lease”, it means this lease benefits the landlord and not you. Brace yourself for 3 or 5 years of uncertainty every time you have a question about your building or a new fee shows up on your monthly statement. Most leases have been written by landlords for landlords.
When you purchase a home you hire a Real Estate Agent. When you buy an investment property, you hire a Commercial Real Estate Agent. When you lease property, again, you should hire a Commercial Real Estate Broker that specializes in Tenant Representation. Tenant Reps know the ins and outs of office leases; language you should avoid and can help you negotiate, plan, design and move your business. A tenant rep will obtain a much better deal than you could on a lease including free rent, moving expenses and tenant improvements. I’m not saying that by calling a tenant rep you’ll receive free rent and have your move fully paid for – but if a landlord is willing to concede items, a tenant rep will find out.
When you walk into a Property Managers office or speak with a landlord on your own, they salivate because of your lack of knowledge. Please, don’t it personally, you sign 2-3-4 leases in your lifetime. Some tenant reps close 3-4 leases each month which is why you should take advantage of that experience. I’ve used a tenant rep in the past and have saved 10’s of thousands while someone else dealt with landlords, attorneys, building owners and property managers.
Every landlord pays 5-8% commission to their property manager. When you have a tenant rep, that fee is split between the property manager and your rep. If you don’t have a rep, the property manager receivs the FULL 5-8%. What this means is, you pay ZERO out of pocket dollars to have the representation of a tenant rep. Most business owners are unaware of this and try to go it alone. Meanwhile, your business sputters for 3-6-9 months because you were “working on your new lease” or “searching for a new office” instead of focusing on what earns you the most money – running and growing your business. The landlord pays the tenant rep when the lease is signed, not you!
We strongly advise that you call a tenant rep the next time you’re planning a move within 6 months. We can assist with tenant rep services so if you need a referral, please don’t hesitate to contact us.