If you’re in business, odds are that your lease payment is the biggest line item in your budget. Rarely does anything else impact your bottom line as much. Getting the right lease on the right terms can make or break your business.
And having a professional represent your side in a lease negotiation usually costs your business nothing. Read on to learn why it’s typically the other side that pays for your representation.
Commercial leases can be complicated documents. Sadly, most tenants go directly to the landlord’s representation and deal only with them. When you jump into an arena you are not familiar with, you could pay for it with unfavorable rates, terms and conditions.
You wouldn’t go into a legal battle without an attorney. You shouldn’t go into negotiations for commercial space without a tenant representative either.
A tenant representative is a state licensed real estate agent who specializes in finding available spaces and negotiating commercial leases on behalf of a business. They not only know what’s available for lease in the market, but they will consult with you to understand the unique needs of your business model. With this knowledge, they help position your company or organization in the right space for the right price and term. A skilled rep will also help deal with other crucial factors, such as securing landlord concessions and negotiating build-out terms. Need to secure purchase options or early-termination provisions? Once again, having professional representation can help ensure the contract you sign will work in your favor.
The best part: a tenant rep usually costs you nothing. In general, when an available property is listed on the market, the landlord’s representative offers a cooperation agreement with any tenant representative who brings a qualified lessee. So even though a tenant rep fights exclusively on your behalf, it’s normally the landlord who pays for the services. And if the other party is footing the bill, why wouldn’t you want one on your side?
A tenant rep will act based on the specific needs of your business. Consider the importance of the right location. If passerby traffic is key to your business model and you rent a space with insufficient traffic counts, your business will be at a major disadvantage. On the other hand, if vehicle or pedestrian traffic has no impact on your business, but you pay for prime space on a busy street, you could be throwing money away without any return for your business.
Don’t go it alone! The landlord is likely represented by a leasing professional — you should be too. Often commercial tenants will continue to see the benefits of representation for years to come. When that seemingly insignificant detail in your lease rears its head and you find you’re already covered, you can breath a sigh of relief and continue to focus on your business. You’ll probably even give your rep a call to say thanks!
Tenant representation: it’s about so much more than just the lease rate.
If your business or investment needs involve real estate, connect with Matt Mellott today at (406) 203-3950.
