Part One of this blog series focused on how to decide if you need a tenant broker. Part Two discussed the numerous ways in which a broker can help you through the leasing process. Part Three will pinpoint examples a broker will help you save money.
Listed rates of a property include the rental rates, marketing costs, and best of all, tenant representation. If a lessee does not hire a tenant broker, than the listing agent receives the entire fee and the lessee does not have an advocate to assist during the leasing process. A tenant representative can save you money by:
1. Gaining the best improvement allowance. A lessee may not know what the market value is for an improvement allowance. If they do not know the market value, then the tenant may agree to a higher allowance amount and lose the difference. A difference of $15 can equate to $1.5 million in savings on a 100,000 square foot building.
2. Identifying harmful provisions. Sometimes operating and tax expenses increase throughout the span of the lease based on the base year. But what is the base year and what is included? Many questions can arise if details are not specified.
3. Creating terms that benefit your company. Tenant representatives can assure the benchmark for your company is stated in the lease. Several leases hold the tenant responsible for ongoing maintenance. Brokers will make sure the move-in condition is mentioned within the lease so you will not have to pay for pre-existing conditions like faulty plumbing.
4. Increasing concessions. Several tenant brokers negotiate specific concessions like rent. This allows you to receive a few months of rent free. With a couple of months of free rent, you can move-in and set up your company, and operate from the old structure without paying rent on two spaces at once.
Your company will save thousands of dollars by using a tenant representative. They know the ins and outs of the market, lease language, and how to negotiate the best concessions. Save yourself time, money, and energy by hiring a tenant representative.