7 Benefits of Hiring a Tenant Representations Advisor Broker
Hiring a tenant representation advisor broker might just be one of the most financially beneficial decisions you make for your business. A tenant representation advisor broker is not a realtor for the buyer or the seller but rather someone who is there to protect your company’s vested interest. They are someone who will advisor broker the deal between all parties to help you achieve the best commercial real estate deal possible.
What is a Tenant Representation Advisor Broker?
A tenant representation advisor broker is someone who negotiates a deal between a property owner and a commercial real estate end-user or tenant. They represent the tenant involved and help to ensure that their best interests are represented. These company advisor brokers work with all parties involved in helping the negotiation process so the tenants’ rights are represented, and not ignored in favor of investor interests.
The main responsibilities of a tenant representation advisor broker is simply providing deep industry knowledge and process management skills that a tenant may not possess. Meaning they help a tenant to know what questions to ask, what information they need to gather and what smart financial decisions need to be made to move the process to completion.
All the Parties Involved in Commercial Real Estate
So your company is ready to purchase a building OR they’re ready to expand to a new space, but where do you begin?
If you were going to be renting a commercial space a realtor might be helpful to help you locate properties. However, most often these realtors are representing the landlord and not the tenant and they have fiduciary responsibility to achieve the best terms for the landlord.
We aren’t saying this is the case for every realtor or that you will never get a good deal, but there isn’t anyone looking out for you, the tenant, other than yourself.
You can bring in a lawyer to help with the legal aspects, but they are not focused on protecting your financial interests. In some cases, you may have a lender involved if financing is being lent from a financial institution, BUT they are there to represent their own company’s interests.
This is where a tenant representation advisor broker is crucial. Our commercial real estate advisor brokers step in to help your company make sure you get the best agreement possible and aren’t making any commercial real estate decisions that could hurt your company fiscally.
The Seven Benefits of a Tenant Representative Advisor Broker
1. Finding properties that aren’t listed on the MLS.
It’s quite common that a commercial real estate location is identified before the property is even listed for sale or rent in the commercial multiple listing service. Often realtors spend a lot of time networking and building relationships so when a building becomes available, they know who to call to quickly find tenants.
From the tenant perspective, if you were searching for a commercial property but don’t know what is all available because you’re only looking at the MLS listings you might be missing the perfect real estate opportunity for your company.
A tenant representative advisor broker has access to these inside deals prior to them being listed on the MLS. Meaning a advisor broker is able to find more available commercial real estate properties than you would be able to find on your own by search in the MLS directory. In general, the right property for your company may never make it to the MLS listing. These properties go to the networking connections they have made over the years.
2. Finding properties within your budget.
When a realtor is representing the landlord, their priority is to find a tenant that will pay top dollar, stay a long time and always be on time with payments. Meaning they aren’t most concerned with what is best for the tenant’s situation.
When you have a tenant representation advisor broker it removes the bias because they are not representing the landlord, they are only representing the tenant. Meaning you are more likely to find a property that is within your budget and fiscally responsible for your company. The advisor broker wants to see your company make smart financial decisions and has no vested interest in any choices that conflict with this goal.
3. Reviewing your commercial real estate needs from all angles not just financial.
There are many other real estate needs other than just physical. You may need a certain type of building, a certain location, a certain size of office, or you may need to make space for a business function you hope to acquire or start organically.
These are all things a realtor representing a landlord will not be taking into consideration when showing your property. Their main concern will be getting the landlord the highest paying tenant.
Of course, we are implying all realtors are like this because there are a lot of really great realtors out there that go above and beyond. It’s just to say they are vested financially and getting their landlords top paying clients. When you have a tenant representation advisor broker it avoids conflict of interest and puts the focus more on finding the right fit for your company.
4. Negotiating a fair price for both parties
The actual negotiation process includes more than just analyzing numbers. You need an experienced party who knows how to negotiate, what information is best suited for negotiations, and most importantly to know when to walk away.
A tenant representation advisor broker will be active in all parts of negotiation even when the tenant can’t be there themselves. Through these industry knowledgeable negotiations, a tenant representation advisor broker will be focused on getting you a fair price. Having that in-depth industry knowledge will be crucial to determining what a fair price is.
5. Knowing what questions to ask the landlord prior to legal agreements being signed
Before deciding to become a tenant there are quite a few questions to ask about a property. Even if you have rented or owned before it may allude you as to what questions to even ask a realtor or a landlord. Someone who does this for a living and is constantly in this field knows the exact questions to ask to provide you with the correct information.
Most commonly, they know the questions to ask that the landlords are hoping you don’t ask them.
6. Knowing what information should be put into the legal agreement.
Once the property has been found and the negotiations are complete, both parties will begin the contract creation phase. Most often a lawyer is used to create the actual contract. However, a tenant representation advisor broker is there to represent your needs and utilize their industry knowledge to make sure everything you need in the contract is going to be physically beneficial to you.
7. Negotiating other benefits other than price.
There are a lot of other pieces that need to be negotiated for commercial real estate properties other than price. If you’ve never rented a commercial space, you may not know what other things to ask for or to try to negotiate. Having a representative on hand with industry knowledge and who knows the other pieces to negotiate not only saves your company money but provide immense value.
What it Would Look Like if You Did Not Have Tenant Representation
So, what does it look like if you choose to not use a tenant representation advisor broker?
Simply put, you are at extreme risk for making mistakes that will cost you money. If you have never been through the commercial tenant process there may be questions you don’t know to ask, negotiation tactics you might not be familiar with, and you may end up getting a bad agreement that will negatively impact your business for several years.
While this all sounds awful it could affect you and your company for years to come if you were stuck paying high rent with little flexibility for growth or space reduction. . A tenant representation advisor broker knows your current budget needs and understands your future budget desires to help the client appropriately plan for the future.