What is Tenant Representation?
Tenant representation is a part of commercial real estate where the broker (a tenant rep) represents only the tenant’s interests.
These tenant rep brokers help businesses find, negotiate, and lease commercial space.
Landlords will often have their own landlord representation, as well.
Why Tenant Representation is Crucial for Business Owners
Whether you’ve got the next best restaurant, hottest boutique, or an up and coming tech startup, odds are you’re going to need commercial space.
You’re probably asking yourself, “Where do I begin?”
You could scour the internet for options, use your free time to drive the market hunting for “available” signs, and call your friends and family in hopes they know someone who knows of something available. Or, you could save yourself countless hours and likely a pounding headache and enlist the help of a Commercial Real Estate Broker.
Brokers that specialize in Tenant Representation can be the most advantageous force in your commercial search . And here’s why:
Your Best Interests are Priority Number One
As any business owner or entrepreneur knows, having the right people in your corner is crucial to your success.
What happens if you do find what seems like a viable option to house your new concept?
If you’re unrepresented, you’ll be receiving information from the owner or owner’s broker. While the broker may be knowledgeable and a great deal of help, his/her responsibility is to represent the owner’s interests, not yours.
So, why not level the playing field?
By using a qualified tenant rep for your commercial search, you can rest assured that you have a real estate professional on your side whose sole goal is to provide you with all available information and every opportunity possible.
2. Variety of Options
Given your tenant rep’s duty to find you your ideal space, you’ll also be presented with a number of options.
While an owner’s representative only needs to sell you one space, your tenant rep will be able to review and discuss a much wider selection of spaces that fit your needs.
Having a broker on your side allows you to compare and tour different sub-markets, product types, and properties so you can be confident you are making an informed final decision.
Check out our blog on The 13 Questions Every Small Business Owner Must Ask Their Commercial Real Estate Broker.
3. Network & Off-Market Opportunities
Worried that the commercial real estate market just seems too tight?
Experienced tenant reps will have a broad network of other brokers, developers, and even property owners, opening the doors to off-market deals that aren’t yet advertised to the general public.
Many commercial real estate deals are done off-market.
That’s why you never hear about them.
Because so many space are taken before their availability is ever made public, it’s crucial that you have the ability to network with property owners, brokers, and others that are involved in these projects.
If on-market options just don’t seem to work, your perfect space may be just a few phone calls away for your broker.
4. Making The Deal Work
Once you’ve found a space that you are ready to move forward with, there’s still work to be done.
Anyone who has had contact with any form of real estate transaction knows that there will be hurdles to clear before reaching the finish line - negotiating the letter of intent, nailing down floor plans, finalizing leases, and coordinating attorneys, contractors, and more.
Your broker will know where the market is, which should help you significantly when you’re negotiating the rent, tenant improvement allowances, partial or total rent abatement, and more.
Luckily, your tenant rep broker will have the experience and knowledge to guide you through the process and present creative solutions to make sure the deal works and gets done.
What Should Tenant Representation Cost a Business Owner?
Not only will a good broker help you save time and money during negotiations, tenant representation costs the business owner seeking space nothing.
Tenant representation fees are already baked into each and every deal available on the market - just like buying a residential home.
Since landlords and property owners are responsible for brokerage fees the majority of the time, the help you receive throughout your site search is complimentary to you.
To date, The Cauble Group has never charged a tenant for its Tenant Representation services.
Unfortunately, many business owners end up taking the wrong approach and try to find and negotiate for space on their own - a big no no in this industry due to the massive learning curve of information. So, if you’re taking the right approach and hiring representation, what questions should you ask when interviewing potential tenant rep brokers?