The Roles of the Tenant Representative
The logic behind tenant representation is that in order to reach an equitable solution to a particular need (leasing space), the corporate tenant needs access to market information, transaction expertise and negotiation skills equal to that of the landlord who utilizes professional representation.
An effective tenant representative takes on several key roles in the process of finding and securing office space for his client, these include:
Market Expert: In order to be successful in the discipline of tenant representation it is required first and foremost to have intimate market knowledge of the space inventory of a particular product type, whether it is the office, industrial or retail property. They know the buildings and the good bad and ugly of each particular property, as well as the availability and timing of vacant space. They understand market trends and provide a realistic assessment of the market.
Professional Negotiator: Negotiation is an art more than a science, all though there are proven negotiation techniques that can be learned. The art is how to apply those techniques in the client’s particular situation. The best lease negotiators understand how to create as much leverage as possible based on market conditions and the characteristics of the tenant/client as well as the goals and characteristics of particular building owners.
They also have a solid reputation and professional relationships with building owners and their leasing teams. Timing and competition are critical factors in addition to negotiation skill. The best deals are positioned properly, making effective negotiations possible.
Process Manager: The days of just knowing the market and matching your client’s requirements to the available inventory, then negotiating the best deal possible are long gone. The best tenant representative are not only market experts and effective negotiators, but also are adept at managing the whole leasing process and possess knowledge across multiple disciplines including:
- Architecture / Space Planning
- Financial Analysis
- Demographic Studies
- Human Resources
- Information Technology
- Furniture Systems
- Engineering and Construction
- Real Estate Law
Several other professionals are typically utilized in the leasing process (Architect, Lawyer, Engineer, Construction Manager, General Contractor, I.T Vendor, Furniture Vendor, etc); the best tenant representatives have knowledge in these areas and stay on top of the latest trends in these disciplines related to leasing and use of the office premises.
They also possess the skills to assemble, coordinate and manage, the diversified team of professionals involved in the leasing process. The office leasing process is complex and through-out the process, many decisions have to be made with the help of third party consultants regarding a company’s office space.
Think about some of the major decision points and the professionals required to assist in those decisions:
- Selecting the right location and building
- Analyzing and negotiating the best financial terms
- Designing the space that compliments your operations
- Selecting the right furniture, equipment and information technology systems
- Maintaining quality and cost control in the design and construction process
- Negotiating an equitable and flexible lease contract
The one professional that should be engaged in managing the team of consultants utilized in the process, is the tenant representative.
More than a broker
The best tenant representatives should already know, or take the time to intimately understand your goals and objectives, your industry / competitors, how you utilize your office space and facilities, as well as how real estate fits into your overall business strategy.
Real Estate and office space transactions are long-term decisions that can affect the operational and financial performance of your enterprise. Today, you need more than a broker to identify vacant space and negotiate lease terms. You need a consultant who recognizes the difference between sound business management and real estate sales.
Subscribe to my posts via e-mail: here