There are scores of “tenant only” brokerage firms around the country and hundreds of brokers who have dedicated their careers to representing only tenants. Thousands of companies have chosen to work with these firms and brokers because they believe there is an irreconcilable conflict of interest when brokers attempt to represent both landlords and tenants in the same market.
A very wise mentor of mine once told me that when a seemingly smart and rational person takes a seemingly irrational position in a negotiation, it can be explained in one of two ways: either the person is not as smart and rational as you thought they were or, more likely, they have a hidden agenda or knowledge of certain facts which, if revealed to you, would reveal the rationality of their position.
When you look at leasing comparables for particular building, one consistent pattern invariably exists – renewing tenants don’t achieve the same deal that new tenants receive. Tenants often believe that because they are a good, rent-paying tenant that their landlord surely wants to keep them on favorable terms. Many tenants don’t realize that landlords view renewing tenants as captive, and already have factored a high renewal probability on favorable terms for the landlord into their pro-formas. Tenants can avoid this discrepancy by taking steps to make their landlord compete to keep their tenancy.
Rate. Landlords focus tenants on the rate, and as a result, the rate is the most common term tenants and their business advisers focus on when discussing their leases with each other. Tenants need to go beyond landlord marketing tactics to understand the other 24,999 words in a lease that can cost them money.
Think back to high school math; it probably started with algebra and ended with calculus. Up until calculus, your math homework may have been easy; if you were so inclined, you could look up the answer in the back of the book and be done with it. This easy road came to dead end, however, when you got to calculus. In calculus, you actually have to prove the answer. In a lease negotiation, it’s not enough to tell the landlord that x=30 (dollars per square foot that is); you actually have to prove through the right process that you deserve the terms you seek and the terms that you should be seeking.
When it comes time to sign a lease on new office space, you’ve undoubtedly put considerable thought and countless hours into finding the perfect space. You have every reason to be excited about signing the lease and getting the show on the road. However, in your excitement, it’s vitally important to be certain that you really haven’t missed anything. That means you’ll need to put forth just a bit more effort in focusing on the fine print. After all, with all the time you’ve invested in your company, the last thing you need is to find some loophole that may wind up being a financial pitfall. Here’s a look at five items that warrant your attention before you sign that dotted line.
Most companies and organizations undergo a thorough process for selecting an employee. Whether for the position of Chief Financial Officer or Receptionist, a carefully designed evaluation is conducted. Hire slowly and fire quickly, as the saying goes. So why should the decision to hire a tenant representative to manage a process encompassing your second largest expense be any different? As this article will demonstrate, now is not the time to hire your golfing buddy.
Later this month the International Property Measurement Standards Coalition is scheduled to announce a single measurement system for the global office market. Theoretically, this will combat discrepancies in the ways that office space is measured, and level the playing field for landlords and tenants. Sounds great, right?
These days, countless millennials and young professionals are preferring to start a company rather than going to work for someone else’s company. Need proof? Entrepreneurial rates are soaring above those of the dot.com (boom and subsequent bust) era of the late 1990’s. However, the entrepreneurs of today aren’t willing to make the same mistakes that previous generations made. Fortunate to learn from the mistakes of their predecessors, today’s entrepreneurs are leery of spending too much, too soon, with too little assurance that their business will succeed.