Resist the Urge
You are driving in your car and you see a “For Lease” sign on the building. You happen to be in the market for space and you want to call for more information. Logically, that makes the most sense, however, the phone number you see is for the building owner’s representation. If you do not have your own representation, the situation can quickly become unfavorable for you. You are one of the lucky ones if you DO know you are dealing with the competition but, unfortunately, many business owners aren’t even aware of the conflict in the first place. They simply see a desirable building and call the number none the wiser. Resist the urge to call the number on the “For Lease” sign. Instead, take down the number and the broker’s information and give it to you tenant representation broker.
This is when the tenant representative rides in on the white horse and forsakes all landlord allegiances to represent only the tenant in commercial real estate transaction. Tenant representation has taken root in corporate America, where space users seek out tenant-only brokers and tenant-only brokerage firms have grown in response to this demand.
Tenant representation brokers are commercial real estate brokers who work exclusively for the tenant and never represent the landlord. The tenant representative role developed in response to the conflicts of interest that were, and still sometimes are, rife in the industry. They are now a universally embraced, specialized sector of commercial brokerage, with a broader range of services focused on the unique needs of a tenant such as space planning, construction management, lease renewal consulting, site search, financial analysis and strategic negotiations.
Risk of Conflict
There is a very real risk of working with a broker who has blatant conflicts of interest. It is in your best interest to be intentional when searching for a broker who only focuses on tenant representation. In the old model, the landlords and their brokers held all the cards. The tenants were merely a means to an end. With the advent of tenant representation, the industry is waking up to the reality that the tenants actually hold all the cards, because the tenants pay the rent. In truth, landlords are utterly dependent on the rent tenants pay as their sole source of income. Unfortunately, many tenants don’t realize they hold all the cards and have all of the power. A good tenant representation broker will enlighten you on the leverage you actually do have.