Quality tenant representation goes far beyond listings and price per square foot
It is difficult to overstate the importance of quality tenant representation in commercial real estate. Through the peaks and troughs of the market, a good tenant rep must be able to assess economic trends, broker deals, thoroughly evaluate a client’s needs, and make sure those needs are always their priority. The best reps will possess a rare combination of market awareness and vision. They’ll not only work for you but with you to understand that the deal is more than just finding a rental space – it’s a decision with specific financial implications that directly impact the success of your business.
If you’re thinking of braving the property market alone, take a moment to review the hallmarks of an experienced tenant rep – and how having one on your side can make a world of difference.
Excellent tenant reps appraise the full potential of properties
A successful real estate deal must be viewed within a strategic framework. A great tenant rep will size up a potential property holistically, evaluating exactly how it will meet the client’s needs while contributing to the business’s bottom line. They’ll do a thorough check on the property and basic financials of course, but beyond that there are a variety of factors that may or may not suit the property’s intended use.
In order to find the right facility, professional tenant reps become lay experts about their client’s profession. A physician looking to open a new office will have vastly different needs from a manufacturer aiming to move to a new facility, including factors like location, access to parking, visibility, and the physical infrastructure of the space.
Developing this client-specific expertise comes from both experience with a range of clients and asking the right questions. A real estate professional will coax necessary information out of clients who may know they want a space, but may not be aware of the specific elements that will maximize its value. Some examples include:
- Financial aspects: Does the price per square foot fit within the client’s budget? And does paying a little more or a little less make more sense when other factors will contribute or detract from the value of the space? Long-term, what is the projected growth of the property’s corresponding value and its potential for rate increases?
- Spatial and structural needs: Is a potential office space for 40 employees going to have the square footage and layout for the open, closed, or hybrid office design envisioned by the client? If a property is intended as a warehouse, are the ceilings high enough and does it have a loading dock? Does a retail establishment have enough storage for inventory?
- Geography: Is the location desirable for the principal stakeholders? For a retail business, this might be as simple as obtaining a space in an area with high visibility and foot traffic, as well as nearby anchor stores and little direct competition. A shipping company may be looking for quick access to transportation hubs and a wide enough perimeter for its security strategy.
- Image: Does the location befit the business’s brand? This is a key consideration in office and retail locations which must make the right impression with clients, potential employees, or customers.
These are just a few considerations in addition to the essentials that every client needs to know, such as the cost per square foot and zoning regulations. For example, a business services company looking to find a new office space needs to consider if the property’s image is the right one, whether it’s centrally located for employees or clients, and if the building is flexible enough for anticipated growth or reduction of the organization. Tenant representatives assess these needs by spending the time to learn as much as possible about a client’s business.
A great tenant rep is always transparent
You hire a rep to help you navigate unfamiliar territory – but you don’t want to be a mystified onlooker while they hammer out a deal on your behalf. You may have a lot of questions, and a good rep will answer all of them while keeping you proactively and fully informed at every stage.
Commercial real estate shoppers should look for a rep who uses an open book process to analyze the entire market. Essentially, this means that you will see everything within the parameters that have been established, giving you greater flexibility and fewer surprises or regrets. With an open book process, there is simply no downside to using a tenant rep – once the list of properties is generated within the specified parameters, you have your pick of the entire market. When it comes to dealing with potential landlords however, that becomes a closed book as the professional tenant rep does their best to leverage the market in their client’s favor. The open book transparency is solely between the tenant rep and their client.
From there, a tenant rep will help you evaluate the candidates based on everything from image and cost to infrastructure access, zoning, future growth, and even macroeconomic or industry-specific factors. Complete information means complete freedom to choose.
Quality tenant reps consider all options
Some companies know that they aren’t happy with their current space, but moving may not be the best decision. The rep will assess what works in the current space and what doesn’t, followed by always providing options that are in the best interests of the client. For example, if the current space is too hierarchical for a collaborative work environment and can’t be modified, then a move may indeed be necessary. But if the real issue is that the cost per employee or square foot is too high, or a business needs to expand and there is the potential to lease adjoining space, it may be smarter to simply renegotiate the current lease. If so, the tenant rep will step in to negotiate with a landlord who is looking to maximize his or her revenue stream and doesn’t have the tenant’s best financial interests as a top priority given that the profit motive is understood and appropriate for each party to work hard to negotiate for the best terms possible. The professional tenant rep will take into account the various landlord’s metrics and advise their clients of what is and isn’t a sustainable transaction
A good tenant representative will impartially provide this advice, regardless of the personal financial benefit from one option or the other. Doing this isn’t simply ethical, it’s practical. Success in real estate is as much about long-term relationships as it is about immediate ROI, and one feeds the other.
You can take advantage of our free market report if you’re thinking of a property move. And if you’re convinced of the benefits of top-flight tenant representation, then look no further.
At Morris Southeast Group, we’re proud to be among South Florida’s leading real estate brokers. Since 1976, we’ve been devoted to meeting the diverse property needs of our clients. For comprehensive tenant representation, you can reach us at (954) 474-1776 (ext. 303). To speak directly to our president, call (954) 240-4400 or email him at kenmorris@morrisgroup.com.
Tags: commercial real estate, Traits of a Good Tenant
