Whether you’re looking into commercial property for your office or you want to start investing in commercial real estate, make sure you do your research before you sign any documents. You may have inked deals with landlords in the past, but commercial real estate is an entirely different market. You have probably done your research and learned a fair share about the market in your area, but when it comes to buying or leasing your first property, you shouldn’t go at it alone. Instead, find a tenant rep to guide you through the process. A tenant rep is a licensed commercial real estate professional who can help with tenant-landlord negotiations. Here are five reasons you should use a tenant rep.
They Speak the Same Language
Be honest, do you always read through every page of a lease or renter’s agreement? With a commercial lease, it’s important that you read and understand all your rights and responsibilities. While you can ask the landlord or property manager pertinent questions, why not get someone on your side who is familiar with the industry terminology that may be confusing for a novice renter or investor?
A good tenant rep can draw on his or her experience, knowledge of market data and industry relationships to help you get the best terms from a prospective landlord.
A Tenant Rep Can Level the Playing Field
Landlords want to make money on their property. Even if you’re investing and hope to make money down the road, initially, you want to save money and find the best deal. With a tenant rep, you have a better chance of this happening. No matter how much research you do, the landlord has the advantage because he or she is already more familiar with the industry and the market, and most landlords have their own representation. Hiring a tenant rep levels the playing field and gives you a fighting chance.
Your tenant rep will have the expertise and experience necessary to help you negotiate and interpret your lease. They can ensure you understand exactly what you’re paying for.
They Can Help You Find the Less-Obvious Options
If you’re new to the commercial real estate world, you may start your property search in the same way you would for an apartment or house. You might check online, drive around the local area or scan the newspaper.
While you have access to a number of listings, it’s a competitive market and the best places go quickly. A tenant rep has access to a number of tools, they can find listings before they go out to the public and they can also help you find a less-obvious option that may work better for your needs and your budget. Your tenant rep can also save you time during your search by only recommending listings that suit your needs.
A Tenant Rep Can Assist With Negotiations
Just because you counter the first offer doesn’t mean you’re getting the best deal. When you have professional representation, you can determine if an offer is reasonable for the area and the space. A licensed professional can also help you decipher any hidden costs, like operating expenses, which may cost you more money than you anticipated. Operating expenses are an important component of negotiation because they represent a cost center to the tenant. For example, will all building expenses be passed directly through to the tenant or will expenses be passed through once the expense exceeds a certain dollar amount?
The negotiation process can be long and arduous. You need market knowledge as well as some legal knowledge. Tenant reps can cut through the fine print so you know exactly what’s expected of you as a tenant.
It Doesn’t Cost You Anything
You may be hesitant to hire someone because you’re worried about the added cost. Unless otherwise noted, the tenant doesn’t pay commission to their rep, the property owner covers the commission for both sides of the transaction (to the listing agent and the tenant rep) when the lease is executed. This means you can get expert advice, negotiation assistance and industry insight at little to no cost to you.
Before you even check out your first listing, contact a real estate tenant rep or seek advisory services. When you have an experienced professional on your side, you can feel more confident in your first commercial real estate investment.