Caldwell Companies Associate Broker Nick Terry shares his thoughts on the advantages of using a broker to negotiate your lease.
Relocating can be expensive, cumbersome and disruptive. If you are happy in your space, it may seem faster and less complicated to deal directly with the landlord. Unfortunately, savvy landlords use this to their advantage and are less motivated to offer the same competitive terms they may offer new tenants.
A qualified broker will shift the balance of power back in a tenants favor using a 3-pronged strategy:
- Market Knowledge - There is much to be said for the value of market knowledge that an industry professional provides. A commercial real estate team, active in your submarket, understands local vacancy rates, new product on the market, cost of buildout (which is not necessary for a renewal) and how these complex factors should affect your rental rate.
- "3 Bid the Work" - Competitive bids are a driving factor in any successful negotiation. Your broker will identify at least two other suitable choices, creating flexibility for you, and forcing your landlord to present their best rates up-front.
- Re-work the Current Lease - With a brokers help, renewing your lease is the ideal time to address less than favorable terms in your original contract. Landlords are often willing to negotiate terms such as operating expense calculations, expanse rights, fee structures, and HVAC charges, even if they aren't able to move on the base rental rate. Each of these components can have a significant impact on your bottom line.
Keep in mind, your tenant rep brokerage fees are covered by the landlord. Choosing a broker to exclusively represent your interests frees you up run your business and keep doing what you do best.