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.
Filed under: Commercial Real Estate, Negotiation, Portfolio Management, Project Services, Real Estate, Site Selection, Transaction Advisory, Workplace Integration | Tagged: lease audit, space planning, tenant rep, tenant representative | 2 Comments »