As your Tenant Representative, Kothe Real Estate Partners helps you uncover economic opportunities and avoid leasing pitfalls in commercial real estate transactions. We will work on your behalf to:
- Cut real estate expenses
- Turn your space into a strategic asset
- Select space for your organization
- Successfully negotiate a lease or purchase agreement
- Prevent missteps
Tenant representatives are obligated to work exclusively on your behalf and have your best interests at the forefront. A good tenant representative should generate savings and benefits that far exceed the cost of his or her professional compensation. A tenant representative is usually paid by splitting the commission with the landlord broker, resulting in no additional cost to you or the landlord.
A proactive tenant representative will:
- Analyze your space needs.
The tenant rep can assist you in determining your actual need for space and layout needs. This can prevent you from wasting time on property negotiations that are not right for your organization. Most importantly, it can prevent you from leasing too much space. The landlord has no incentive to help you economize on space and save money.
- Investigate all available properties and determine which are the most appropriate for your needs.
This involves more than scanning the available listing services. A professional tenant rep can identify a property that is not an obvious choice to meet your needs. This could result in lower rental rates and space that is otherwise better suited to your needs.
- Create a bidding war among several landlords for your business.
A good tenant rep can launch a successful bidding war and prevent you from being a “captive audience” to one developer. The optimal number of bidders is usually three. Even if there is one property that you and your representative agree is the best, creating a three-way competition will optimize your negotiating position. The result can be concessions and incentives that exceed the norm in the marketplace, such as free rent for several months or an allowance for tenant improvements.
- Protect you during lease negotiations so that you come away with terms that meet your present and potential future needs.
The tenant representative knows all the ins and outs of real estate transactions and can help you avoid possible pitfalls. For example, a tenant representative would ensure you retain such options as subletting in case you eventually shrink your organization or outgrow the space.
- Serve as a buffer between you and the landlord.
A tenant rep can act as the intermediary during negotiations. While working with your tenant representative in securing major economic concessions, you can keep your relationship with the landlord cordial. You may need the goodwill later on.
- Identify lease provisions that could cost or save you money during the lease term.
These often are hidden in the document and are easily overlooked.
- Handle the paperwork and other details of the lease negotiation.
Having a tenant rep prepare all proposal requests and letters of intent can help to resolve issues before the final lease is prepared. A professional tenant rep is familiar with real estate forms and documents and can help you avoid disasters by signing something by accident.
- Settle disputes that arise even after the lease is signed.
The tenant representative can serve as an experienced set of eyes and ears to verify the details of a transaction. The tenant rep’s transaction files can provide the documentation necessary to clarify what was said and done during the negotiation.
- Spotlight the savings.
When you see rental rates quoted for space, those rates include the marketing costs for any leasing representative or for the developer’s in-house marketing. Compensation for the tenant representative is also part of the stated price. A good tenant representative should be able to save you that amount and more.
- Ensure you get the most value in any improvement allowances.
For example, without good representation, the tenant may sign on to an improvement allowance of $30 per square foot, not knowing that the actual market price for such work is $50. The tenant representative knows the market and would negotiate that any remaining funds be applied to lower the rent. For a 20,000 square foot building, that would mean a savings of $400,000!
- Safeguard you against signing onto any provisions that run against your economic interest.
Many leases tie rents or expenses owed to the landlord to the consumer price index (CPI) or some other index. Landlords will likely ask that these rents or expenses float with an index. The tenant representative can ferret out such a provision and negotiate a CPI cap for the lease.
- Define lease terms to benefit you.
If your lease holds you responsible for ongoing maintenance, as many do, the tenant representative can assure that the definition of ongoing maintenance does not include the repair of pre-existing deficiencies, such as roof problems that may already have plagued the building. The tenant rep will know how to look at the move-in condition as a benchmark indicating the point at which your wear-and-tear commences.
- Win concessions that anticipate your actual needs.
In some instances, a tenant representative can negotiate to receive a rent concession for “moving and set-up time.” This means your lease begins, but you won’t pay rent during the time it takes to become operational (move in, set up, etc.). Because you will still operate out of your old space during moving and set-up time, this concession prevents you from paying double rent during the overlap period.
The tenant rep is a specialist in selecting and negotiating leases. Making effective use of a real estate
professional will generate cost savings and give you space and terms suitable for your entire lease.