Companies face the rising cost of operating expenses daily, which has made cutting costs a necessity for most businesses. One area not always considered when looking to reduce costs is real estate. By working with experts skilled in tenant representation, a company can often reduce leasing cost for an office space, which in turn can reduce the overall cost of doing business.
Commercial Property Representation
Tenant representation involves a skilled expert acting as a liaison between clients and landlords. While this may sound relatively simple, it is actually a very busy, multifaceted job. The whole process starts before the search for the right building even begins, with an analysis of the company’s needs and a budget estimation. Work continues until the client has successfully moved into a new space. The help of these professionals includes lease negotiations and arranging for space improvements, since the end goal is to get a client into a commercial space perfectly suited to their needs.
How Does This Help?
Using tenant representation is not free, as these agents are paid for their services. In most cases, the cost for tenant representation is paid by the landlord. In addition, the money saved to use this real estate professional can be significant. Following are some of the ways in which tenant representatives can help a company looking for business property:
Analyzing Business Space – Office space must contain enough of the amenities and features a business requires to promote a good work environment. Those who handle tenant representation understand how building location and office layout affects productivity. A poor needs analysis can cost a company money. This step is critical, which is why it should be done by a professional who knows the important questions to ask.
Redesigning Existing Space – When the space demands of a company change, moving may seem like the only option; however, this does not have to be the case. A good tenant representative can determine the best way to get the most out of a leased space, including redesign or renegotiation. Additionally, if there is wasted space, those who handle tenant representation can help a company fill this space with tenants or negotiate a reduction in contracted square footage.
Lease Negotiation – When signing a new commercial lease, there is always room for negotiation. This is one of the main ways that tenant representationcan help a client save money. By negotiating better lease terms, a company can pay less to stay in the same location.
Lease Renewal – Lease negotiations also apply to lease renewals. A renewal is always a new lease, not just an extension of the current agreement – something many companies do not realize. Not only should rates be renegotiated based on current market rates, other variables should also be revisited such as improvements, contract length, bonuses, etc. With tenant representation as a part of negotiations, a company can either avoid a rate increase or bargain for an additional benefit.
Based on these ideas, it should be easy to see how good tenant representation can benefit a company. A significant amount of money can be saved by carefully reconsidering occupancy costs – an option most businesses are not aware they have. To discuss these possibilities, a company should work with a commercial brokerage firm and hire a tenant representative!