Finding your ideal commercial space can feel like a daunting task. But having a professional on your side can make a world of difference. [cue Mrs. Doubtfire’s quote, “help is on the way dear, help is on the way!”] When choosing a tenant representative, there are a few factors to consider because not all commercial real estate brokers are created equal. For larger companies, procurement policies often dictate hiring a similar-sized vendor to support them, which doesn’t always guarantee the best result. However, for small and mid-sized tenants (SMBs), finding the right fit is essential as it can help ensure the SMBs get the support they need to focus on their core business.
We’ve worked with hundreds of tenant rep brokers and have seen firsthand the wide range of players in the market. Here are top tips and factors to be aware of when choosing your tenant representative:
Choose your tenant rep based on:
Trust
In a high-stakes industry like commercial real estate, understanding your tenant representative’s motivations is paramount. We’ve found that individuals working at firms that exclusively focus on the tenant’s interests are worth their weight in gold. Working with someone who isn’t seeking to be hired by landlords allows your representative to concentrate solely on your interests. Often tenants can get burned when out of convenience they work with an agent who is marketing space for landlords. The goals, then, are misaligned with the tenant. When the tenant has someone on their side, they would be able to negotiate a better deal. When this happens, it’s known as “dual agency.” While this may seem harmless at first blush, representing both sides in a transaction often creates a conflict of interest.
Don’t fall prey to the shiny shoes and pinstripe suits – you want someone who prioritizes and advocates for your needs first as a tenant, not a “salesperson.”
Reputation
Tenant representatives are not all cut from the same cloth. Even reps who focus on tenant needs can be ineffective if they don’t have the proper training and experience. Just like hiring a lawyer or accountant, it’s crucial to confirm whether the tenant rep team has experience in your industry, geography and with companies similar to yours. Client testimonials and references can also indicate their expertise and standards and allow you to see if they will get you the best results possible. Also, ensuring your tenant representation works for a reputable firm is vital so that you know they have depth behind the support you’ll receive. Having an excellent reputation within the industry can positively impact how landlords and listing brokers treat your potential tenancy.
A helpful hint is to learn a bit about their experience by looking online, on LinkedIn or their company’s website.
Resources
When choosing your tenant representative, ensure they have the resources to handle your project; this includes listing sites, mapping software and financial analysis tools to help you see the entire market and make an informed decision. Knowing whether a team backs your tenant representative is also crucial. However, don’t fall for the bait and switch, where you hire a senior broker and end up with an untrained junior broker with no experience. Having a team that cares and has a platform to ensure your success is just the beginning.
Experience
There are various commercial lease structures and asset classes. In addition, every market is different. The office, industrial and retail markets have industry trends and networks, which a specialist will understand. So, finding a tenant representative with experience dealing with your specific needs is essential. Every type of business, from law firms to distribution centers to retail stores (and the list goes on and on), has its unique requirements. A tenant representative who has worked with similar companies (focus, size, industry, etc.) will likely already know your specific requirements and can provide helpful guidance on things to keep in mind. This can save you time and money and ensure you’re on the right track.
Additional Support
Having a tenant representative with an established network of specialized support can make your project go smoothly. A good tenant representative should be able to help you find resources to find the right location for employees and your supply chain, design and build out your space, purchase furniture and help you move. The list doesn’t stop there. A tenant representative with the right connections can ensure you stay on the right track.
Understanding the services your tenant representative can provide in addition to just finding space and negotiating a lease or purchase agreement is important. It is a good idea to find out what the relationship will look like after your lease is signed – and whether they have connections who can help you move in and during the lease’s lifetime (often 5, 10 or 15+ years). Finally, if you need help finding space in other markets, determine whether your tenant representative has experience and connections outside their core local market.
If you are interested in working with a tenant representative, you can complete your tenant profile. You will then be matched with a pro that fits your requirements. In the meantime, look at our “How to Search Spacelist Like a Pro” article.