The Importance of Tenant RepresentationHiring a real estate broker to represent you in your search for commercial space (also known as tenant representation) may not seem as a necessity, however it may prove very beneficial to your success. The process of leasing or buying commercial real estate can be complex and confusing for the unexperienced, so having a broker on your side can make things easier. Tenant Representation Services Are FreeThe first and foremost thing to mention here, is that typically commercial real estate brokers are reimbursed for their tenant representation services by the owner/landlord in the transaction. Brokers provide their services to tenants at no charge. Tenant representation is highly desirable among brokers so don't be shy in asking a commercial real estate broker to represent you. Other Tenant Representation BenefitsMost brokers will be able to assist you throughout the entire process. They have extensive knowledge of the local real estate market, and can provide valuable insight in choosing the right location for your business. They can supply demographic and household income data, traffic counts, rent and CAM comparables and other information that can prove priceless in choosing the right location. Commercial real estate brokers also have access to paid listing services and will be able to provide you with a list of prospective locations featuring detailed information on each location. In addition, most tenant representation brokers already have an established working relationship with many owners/landlords and these relationships may add leverage to their negotiating power. Keep in mind that even though they represent you, they get paid a higher commission on higher rents so don't be afraid of asking your broker to negotiate the terms of the lease. Depending on the economic conditions, the amount of vacancy in the market and other such factors, an experienced commercial real estate broker may be able to negotiate a lower rent, a free rent period, and tenant improvement allowance. Your broker will also be able to explain to you all provisions of your lease agreement. Your broker will be the main point of contact between you and the owner/landlord (or landlord's broker) throughout the lease negotiations and beyond. As a part of the tenant representation, he or she will also assist you with renewing your lease, relocating or even renegotiating certain terms of your existing lease in some situations. The Tenant Representation AgreementMost brokers will ask you to sign a tenant representation agreement, which officially identifies them as your exclusive commercial real estate broker on record and protects you and them from other parties that may claim otherwise. You should direct all real estate matters to your broker and should not engage in negotiations or discussions with other parties that may later have claims regarding representation or commission. The term of a such agreement is usually one year, and can be renewed on an annual or month-to-month basis. Either party should have the option to cancel the agreement with a thirty day notice.
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