So what does a Tenant Representative do? A Tenant Representative, or Tenant Rep for short, is a licensed real estate agent, broker or brokerage firm that specializes in representing prospective tenants to property owner’s and their lease listing agents.
A Tenant Rep spends a great deal of time learning about the needs and goals of a business and then applies that knowledge to extensively research and analyze specific markets in order to locate properties that are optimal for the needs of their client. Generally agents or brokers who have a significant amount of property listings can not or will not provide this level of service, because they are busy producing market reports for the property owners that they service, pursuing more listing opportunities or conducting meetings with their owners, etc. Not to say they are not qualified to do so, rather this is not a core focus of their business.
Once a property has been identified by a business this is where the Tenant Representative’s market research pays off. Since the Tenant Rep is an advocate for the business/future tenant. This is where the Tenant Representative can use their market knowledge such as recent lease comps, amount of vacant properties in the market area, amount of new supply coming online in the future, etc. and other information in order to establish negotiating points so that the best lease rates and terms are achieved for their client.
Alignment of interests is another reason why a Tenant Representative should be used when a business is seeking out new a new location for the business operations or for a specific division of the company. The reason being is that a Tenant Representative looks at all property listings in the market area and will not be predisposed to only look or even favor their own listings, whether they are in the clients desired market are or not.
Here’s an illustration of what I mean. When a big commercial real estate brokerage firm is getting anywhere from 10 to 50 plus listings a year from institutional real estate owners it’s hard to say that their interests won’t be naturally aligned with the owners who give them a ton of work year in, and year out. Whereas the Tenant Rep Brokers are not getting those listings and would rather work with the tenant and therefore will unequivocally fight for the tenants best interest when it comes to finding optimal properties for their business, and negotiating the best possible rates and terms for the lease.
So business owners it’s in your best interest to use a Tenant Representative. You’re going to find an individual and/or firm who is going to be dedicated to your pursuit and treat you like a number one priority. In addition, tenant representation agreements generally come at no cost to the tenant, since commissions paid to the Tenant Broker are paid by the landlord.
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