Creating a Competitive Environment:
No landlord knows his/her "bottom line" until the alternative
is the loss of a transaction to a competing property. This competition
can only be created by taking the tenant's requirements to the market
and having a professional advocate.
Five and ten year leases are great for owners, and can provide tenants
with low rents, but the loss of flexibility can be costly. Negotiating
for the right to terminate early, the right of first refusal on additional
space and/or the right to extend, all give extra flexibility.
A tenant who works with competing brokers, all of whom are trying to sell
their product or service, must either limit the time he/she devotes to
real estate or use time that would be better used on his/her own enterprise.
Clarifying Corporate Goals:
A tenant representative uses his/her experience to quantify a tenant's needs
prior to presenting properties. What makes the company profitable and
competitive; what makes it tick?
- How important is corporate image and/or visibility?
- Where do employees live in proximity to the proposed
- Define the importance of proximity to specific
highway systems, mass transit, inter modals, ports and/or airports.
- Define interdepartmental communication and work
- Define the impact of tax and other government incentives.
- Stay on track by agreeing to a time frame for the
process up front.
- What are the ideal physical characteristics of
a new facility.
- Ownership vs. leasing.
A letter of representation empowers the tenant representative to communicate
with a wide range of brokers, owners, landlords, and developers to provide
maximum market exposure.
A tenant representative with experience from previous transactions, empowered
by a letter of representation, and apart from internal politics can provide
real objectivity to the decision making process.
Third Party Intermediary:
Utilizing the tenant representative to conduct negotiations allows a tenant
to insulate him/herself from the process. The tenant can then intervene
at crucial points when a impasse is reached.
Complexity and Thoroughness of the Process:
A tenant needs an experienced advocate not rushing to show properties.
Leasing or buying property is a time consuming, complex process of which
showing buildings should be done only after it is determined that the
list of buildings proposed meets the tenant's specific criteria.
Assisting Corporate Counsel on Important Legal
By coordinating with a tenant's attorney, a tenant representative defines
important legal issues while there is still competition.
Patience and Discipline:
This is very important in today's complex real estate environment. For
example, patience and discipline are important when dealing with environmental
issues since one deals with events with a very low probability of ever
happening and potentially with very high cost if they do happen.
An essential element of a tenant representative's service. Breaking down
individual proposals gives an objective "apples to apples" financial
A relocation can be internally disruptive to a company. The tenant representative
keeps the real estate requirement confidential. That is almost impossible
if the tenant works with many brokers. Rumors fly, in companies large
and small, as an army of brokers try to present properties.
The tenant representative is compensated for their services by the owner,
landlord, or developer with a real estate commission commensurate to local