Tenant Rep Services-100% Loyalty For Free?
Tenant representatives assist professional services firms and corporations that have a facility requirement. The tenant rep's fee usually comes from the landlord as part of the listing agreement with the landlords listing agent.
There are times that the landlord's agent represents both the landlord and the tenant, which is referred to as "dual agency". Although the agent already has sworn his or her loyalty in writing to represent the landlord as his principal, with a fiduciary responsibility to act in the best interests of the landlord, the dual agent then pledges to represent the tenant prospect, as agent, with opposing loyalties. When the landlord's agent acts as a dual agent, there is always a potential conflict of interest. It is perilous when an agent represents both sides of the transaction.
A tenant is better served with a tenant rep. What a quality tenant rep does is to gain a total and complete understanding of the tenant's business and facility needs, perform a site search of all available properties, filter those buildings meeting the tenant requirements, arrange tours of properties the tenant would like to visit, negotiate letters of intent to lease space on behalf of the tenant, create financial cost comparison analysis and assists the tenant in negotiating business points for the lease agreement. As exclusive agent for the tenant, tenant reps provide objective, conflict-free advice. Tenant reps do not act as landlords agents.
Although landlord agents work to get the best deal they can for the landlord, tenant reps owe their loyalty and fiduciary reponsibility to the tenant. The tenant gets a much better chance of a fair deal when the tenant rep is working on his or her behalf.
In the past, landlords have had an overwhelming advantage of commercial real estate market information, but with the advent of tenant reps, tenants now have a mechanism to fill the knowledge gap. Tenant reps provide a source of current market data to help level the playing field for the tenant.
Current soft market conditions have created attractive opportunities for tenants. Asking rents are down substantially. There are many quality buildings available for lease. Tenant concessions are generous. However, in order to exploit these opportunities, a tenant should hire a licensed commercial real estate professional as their tenant rep.
With local knowledge of current commercial real estate practices, the tenant rep is an unbiased advocate. Therefore, he or she provides the tenant with the information needed to deal with market savvy landlords and their listing agents. The tenant rep creates leverage and helps the tenant obtain the best terms, beneficial tenant concessions, and a fair and balanced lease agreement.
In summary, by utilizing the tenant reps knowledge and loyalty, the tenant is able to lower occupancy costs, increase productivity with a better building, and secure a fair lease agreement. The tenant gets advice without a conflict of interest. The good news is that the tenant rep is usually paid for by the landlord, so there is no cost for the service. |
