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Navigating 2020 – A Tenant Rep Broker’s Story

Re’Nauta Bell tenant representation broker

Downtown:  My Home

I wanted to take a different route and talk to you guys more on a personal level about business.  This year has been quite tumultuous for most people, including myself.  My story is the same.  Only the details are different.  I think we all came into 2020 believing the turn of this decade would bring magic and wonder in the form of new opportunities…but all we’ve really seen is chaos.  Who would have thought the world would end up on this path?  My own journey through this has been interesting.  I’ve been at three different brokerages in my career and, alas, I finally found my home.  In mid-March of this year I started working as a tenant representation broker at my dream brokerage, however, my first day was the day they shut the offices down for the pandemic.  It was an eerie feeling.  I found myself sitting in the lobby waiting to be called upstairs and, despite that the building itself is 41-stories tall and there’s a waiting list for the parking deck, I was the only one there besides concierge and the cleaning crew.  I wasn’t sure how to feel or what to expect, but I certainly didn’t think I’d be writing this blog post 3 ½ months later from my home office.

Navigating the commercial real estate industry is tough enough but when you add a pandemic plus rioting, it tends to complicate things even further.  It also doesn’t help when the bulk of the rioting took place in your chosen submarket of focus.  Since things are unsafe on so many levels, I usually only leave my house to buy groceries and to take clients out on tours, but I made an exception last week.  A client needed assistance with site selection, so I had to venture out to my submarket of choice.  I decided to bring my son, a future broker, along with me so he could take notes and get some exposure and real-life training.  I thought it would be great to take him to my favorite taqueria before we got to work.  I found some street parking and we started our walk to the restaurant.  As we turned the corner to get to the street we were looking for, my heart sank. 

Am I really not getting tacos today??

It was as if I wasn’t aware of all the rioting that took place there.  Maybe on some subconscious level, I momentarily blocked out what happened in order to enjoy that moment of walking to my favorite Mexican restaurant with my son.  I’m not sure what it was exactly, but when I saw at all those amazing restaurants boarded up, I became deeply sad.  Knowing destruction is one thing.  Experiencing it is another.  Then I thought about my career.  “How am I going to navigate this storm?”  I couldn’t let myself get down in front of my son, so I decided to discard the bigger gloomy cloud and focus on the smaller one.  “Am I really not getting tacos today??”  Even though it looked like a boarded-up ghost town, I decided to start walking down the street anyway.  Right as I was about to apologize to my son about the food, I saw two college students walk out of the restaurant.  The joy I felt was immense (nowadays, it’s all about the little things)! 

My first thought was, “Yay…I get food!”  My next thoughts were about hope.

Going into that taqueria and ordering the same thing I have always ordered from the same man for the past 4 years gave me hope.  It renewed my belief that there is always a positive outcome if you try hard enough.  It showed me that even though there may be barriers in life right now, beautiful creations are still cooking within those walls, even if you can’t see it.  It reminded me that I can find some peace and stability in this, and you can too.  All you have to do…is keep walking anyway.

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Why Should I Hire My Broker Exclusively?

hire my broker exclusively

Georgia Real Estate Law requires a tenant to have a statement in writing of their desire to hire a broker to represent them.

If you are a tenant looking for commercial space on your own, you have probably been speaking to the leasing agent who is the broker (or leasing agent) for the seller. The seller’s agent cannot offer any advice or guidance to the tenant and is not obligated to keep any information confidential. If you engage a tenant rep broker, you are stating that he/she legally represents you. This ensures there is no confusion about whom represents whom. This representation includes investigation and negotiation of the commercial property and the neighborhood that you choose, as well as the process for getting you the best deal.

Tenant representation is free to you. The seller pays the tenant rep broker to bring a tenant to them.  Typically, landlords have built in commissions for tenant representatives as well as for landlord representation.  If you opt to not engage a tenant rep broker to represent you, the entire budgeted commission goes to the leasing agent negotiating against you. The leasing agent does not care about your well-being and doesn’t have your best interest at heart. You will be required to sign a Letter of Authorization (LOA) which allows the tenant rep broker to work exclusively for you to find the best commercial space for your business.  It’s a simple agreement that can be negated with a one line email stating, “I no longer need your representation.” Then you are free to engage a different broker or find the space on your own if you so desire.

Often clients have difficulty articulating exactly what they want for their business.

You may start out by telling your broker exactly what type of space you are looking for but your preferences may actually change as you go around viewing different spaces. As a broker, I listen and watch the reaction each client has to every space I show him/her. I have learned to pay attention to the visceral reactions a client exhibits when viewing a property for the first time. This allows me to get a better sense of what they really want and, from there, I can narrow down the search. Going from broker to broker will not allow you to form this type of beneficial relationship which is the glue that holds good brokerage and good decision making together. Remember, your broker is going to work hard for you because he/she is never paid until you are happily in your new commercial space.  Getting your deal closed is a mutual goal.

Your tenant rep broker will also be able to identify any potential timeline issues by communicating to the leasing agent at the start of the transaction.  Some issues may include a committee approval which most business owners may not be aware of.  On occasion, the landlord will hire a large leasing agency to represent their interests.  The leasing agency may have a board or committee who must come together to vote on final lease structures which could cause a delay due to the number of parties involved.  That is just one unforeseen roadblock an exclusive tenant rep broker can prepare you for but your broker will be aware of many more potential pitfalls.