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We frequently speak with tenants who are interested in obtaining information regarding a commercial property and who have expressed difficulty in getting a return call when attempting to gather market research. Tenants (companies) that are not working with a broker will call on leasing signs posted in front of a building. What the tenant might not realize is that the building’s leasing agent at times is not in a hurry to return the call sometimes due to the size of their requirement or that the space advertised as being available for lease actually is not available at all. Typically, the leasing sign will remain in front of a building regardless of whether or not space is available. We also have found tenants get exhausted spending time conducting research on Web sites that contain only listings belonging to one landlord or Web sites that are paid-advertisement directories that contain very limited or outdated listing information.
Presenting current market options is one of the most beneficial services a broker can offer to tenants in addition to evaluating options when they are faced with renewing an existing lease, relocating/leasing space in other buildings, and exploring ownership opportunities such as purchasing a facility. As an added benefit, a broker familiar with the entire city at times might present options in other areas to consider that might not be offered in their particular submarket or existing location.
One important factor to consider when selecting a broker to assist with leasing space is to select one who is free of any potential conflicts of interest. In other words, when leasing space it serves a tenant well to select a broker who is not working for several landlords as well as (you) the tenant.
Securing a business location is extremely important and typically is the second highest line item in terms of operating expenses when operating a business. Many tenants believe that they are able to handle their company’s real estate needs on their own. One example of how some tenants substantiate their ability to handle their business real estate affairs is by reflecting upon how many leases they have successfully negotiated over the years. Lease terms vary and may extend over a period ranging from one year to 15 years. If a tenant has negotiated five leases over the course of 15 years, imagine how many leases a leasing agent working for a landlord has negotiated in comparison over the course of just a few months. When thinking about this example it is easy to understand why negotiating on your own behalf might not be such a good idea.
Every broker over the years develops their own style and technique of working on assignments and interviewing a broker when making a decision regarding your commercial real-estate needs is a good first step. A lot of brokers work for tenants on a commission structure, which doesn’t involve an out-of-pocket fee being paid directly to then by a company using their services, because it ends up being paid by a landlord who splits the commission between your agent and his or simply remains with that landlord and just sweetens the pot for him at the end of the day.
Additionally, a good broker not only will save a company a lot of time and money by allowing tenants to concentrate on their core business during the course of a real-estate transaction, but also will help save on intangible assets such as the time and effort involved in successfully closing a commercial real estate transaction.
Theodore Brakatselos is the President of Houston Site Acquisitions, a commercial real estate company. He has over 17 years of experience in commercial real estate and has represented a broad range of tenants and landlords over his career including star-up companies, publicly held companies, and overseeing portfolios for institutional landlords & investors. You can reach Theodore at 713-789-8700 or via the Web at http://www.hsaleasing.com/ or TenantRepresentation.com.