The Under-Utilized Tenant Representative

NOTE: This post applies more to small and mid-sized businesses than for large enterprises with in-house real estate and facilities employees.

Since I transitioned into commercial real estate, I have served as a tenant representative for thirteen clients across eighteen active or completed transactions.  About one-third of these deals have come from existing corporate clients, while the others have come through referrals and various prospecting methods I employ.  Whether this number of projects sounds like a lot or a little, there’s one thing they all have in common – if given the opportunity, I could have provided so much more to these clients.

Except for a few particular brokerage firms that focus exclusively on tenant representation, like UGL Equis and Studley, most commercial brokerage houses have built up their tenant representation work out of their existing property management and leasing practices.  An Entrepreneur.com article from a few years back identifies roughly when the shift to begin focusing on tenant needs took place, stating that the process still does not suitably address the needs of the tenant – “most brokers… continue to focus on the specific goal of the property owner–the signing of the lease or purchase agreement.”  Using the term “out-tasking”, the article continues by stating that the right approach is to look at the business strategically and determine what processes, or tasks, can be delegated to an outside firm.

Unfortunately, smaller firms do not typically have the resources or know-how to determine which processes can be outsourced, or even what processes they may have to deal with in the future.  As a result, I feel that many firms, including those of several existing clients, still look on a commercial real estate broker as a space finder, neglecting to appreciate the vast resources we may have at our disposal to help them with more of their facility and real estate needs.  For instance, when was the last time you asked your tenant rep to perform a lease audit to ensure that you weren’t being overcharged for operating expenses (see Are you being served… more expenses than you deserve?)?  Or called on your tenant rep to help you evaluate your space plan to see if you might be able to improve space use and decrease your rentable area (see Calculating your office space needs)?  What about asking your broker to peruse your lease to see where key terms might impact future financial planning, relocation or expansion possibilities (see There’s gold in that contract)?

You may be wondering why I italicized “transactions” and “deals” in the first paragraph.  My goal was to emphasize that these client experiences were based on the old perception of broker as space finder.  At the end of the day, tenant representatives can do a lot more than help their clients simply find space.  We can help you identify your site requirements, ensure that you find the right space on your timeframe, assist you with navigating the build-out and furnishing process and more.  In the past several years, the industry has evolved significantly to better meet client needs.  Now, all you have to do is ask.

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Germ warfare

Ok, so this post isn’t about fighting with germs, but rather fighting against them.  A recent Crain’s Chicago Business article on germophobes set me to thinking.  I’m curious how much office productivity is lost by excessive concern or fear of germs.  Although we have seen some major advancements in office and restroom automation, I have noticed that very few office buildings have fully automated restrooms.  It always seems to be the flush mechanism OR the sinks OR the hand dryers – never seems to be all of the above and the worst culprit (the exit door) always seems to be a pull door from the inside and never automated.  Why don’t they add automatic door buttons for restroom doors so we don’t have to touch the handle, since we never know for certain if the last person thoroughly washed their hands before putting them all over the door handle?

But I digress.  I wouldn’t consider myself a germophobe, but I have worked with some individuals who describe themselves as having extreme obsessive-compulsive disorder (OCD).  One former colleague refused to shake hands with anybody and always tried to piggy-back on restroom departures.  Getting back to my original concern, has anyone run a study on the impact of germophobia in the workplace?  I would surmise that a few simple planning steps taken by the project services group and incorporated into the build-out could go a long way to allaying fear of co-worker contagion and allow some individuals to have the peace of mind to work their best.  Perhaps certain layout changes or natural airflow and light incorporation (signature features of sustainable design) could help produce a healthier workplace.

Better living through efficiency – reducing space to increase happiness

Who would believe that you could save money AND increase morale?  Although this article (Smaller Workspaces, Better Workspaces) is spread across five pages, the essential lesson is that strategic planning and out-of-the-box thinking can result in $1 million in savings over 10 years and simultaneously attain substantial morale boosts among office workers.  One workstation, Allsteel’s Reach integrated storage system, is the subject of the article’s accolades.  Employees were moved from 64 square foot workstations (8′ x 8′) to 42 square foot workstations (8′ x 6′) and actually had positive things to say (see the survey results in the lower left-hand corner).  I was also excited to read the article because it showcases several prominent Chicago-area players: Huron Consulting (the tenant), Interior Architects (the project designer), and Henricksen (workplace dealer consultant).

Now, a cynic might say, “Sure, it’s easy for a huge user like Huron Consulting to get access to new systems like Reach, but what about the little guy?”  Not everyone gets invited to their furniture dealer’s headquarters to inspect prototype systems, that’s true.  However, it is cutting edge testers like Huron that enable smaller firms to explore how these similar systems could help their office increase efficiency.

After-blog mint: I’m excited to have discovered functionality in the NxtBook magazine system that enables linking directly to specific pages, which should serve to improve your experience as I comment on articles from The Leader.

What if someone gave you $50 per square foot to remodel your home?

Would you redo your kitchen?  What about your bathrooms?  Add on a sundeck or a swimming pool?  And why would someone just give you that kind of cash, never expecting to see it again?

In the world of residential real estate, this concept may sound kind of crazy, but in the world of office leases, tenants are routinely given hundreds of thousands or sometimes even millions of dollars to build out the interior of their office space prior to starting a new lease.  Known in the industry as a tenant improvement allowance, or “TI” for short, this seemingly large dollar amount goes faster than you may think, even if you have been through the process before.
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