| Was James Bond a double agent? NO! Was
Inspector Clousou a double agent? NO! Was Maxwell Smart a double agent? NO!
Yet, hundreds of thousands of businesses around the world
unknowingly invite double agents into their boardrooms and inner circles every year. You
know a double agent is ‘trouble’ because they have a built-in conflict of
interest.
Does one give the secret formula to Interpol or Scotland
Yard? Whichever side ends up with the formula wonders whether it’s the real thing or
a cleverly disguised ploy to encourage them to make a poor decision.
Governments, businesses, trade associations and “Mom
and Pops” all face similar situations when their organizations reach the dreaded time
in the business cycle when their lease is coming to an end or when an expansion or
contraction requires them to relocate.
This is always a traumatic time for anyone who leases space
for their business or organization.
Today there are over twenty-five million businesses in the
United States alone and thousands more governmental agencies leasing space. Many tenants
are not aware that most commercial real estate brokerage companies concentrate on
providing services to the landlord community. This only makes sense for the brokers who
spend considerable time developing relationships with owners who control large blocks of
lease-able space, which will be a source of consistent leasing commissions for extended
periods. These broker/landlord relationships take time to develop and are jealously
guarded once obtained.
Every member of a firm is encouraged to support the
relationships that the company develops. This approach is not particular to real estate
brokerage; lawyers, accountants and other ‘consultants of trust’ face similar
situations. The big difference is -- the real estate industry allows their personnel to
represent both sides of a transaction.
Would you choose a lawyer to represent both sides in a
divorce or a surgeon to give you both a first and second opinion about your surgical
needs?
Many business owners and managers are unaware that
“their” real estate agent may be working for a brokerage company that has strong
business relationships with multi property landlords. Even worse, the agents themselves
may be representing one or more landlords who are offering leased space to tenants in the
market. Which landlord does this broker represent or golly, does the broker represent the
tenant or one of the landlords. Decisions, decisions, how does one choose?
It is impossible to fairly represent both sides of
anything. After all, we wouldn’t have ‘sides’ to consider at all if that
were the case.
Landlords hire brokers to insure their best interests are
represented regarding such things as which spaces in the building need to be filled,
limiting tenant improvements, negotiating landlord oriented leases and getting the best
price for their property. Nothing wrong with trying to do the best you can and hiring
experts to give you an edge!
The problem is that most buildings have marketing and
negotiating specialists representing landlords and many tenants are out in the marketplace
un-represented or represented by a firm or maybe even a broker who also directly or
indirectly works for the landlord. Because it is more lucrative to work for landlords, few
brokerage firms are organized to represent just tenants in the market place. Tenant
Representation as a specialty started several years ago and is steadily gaining popularity
in this country and overseas as more and more companies become aware that alternatives to
dual representation exists.
5 Tips To Hiring A Tenant Representative
First - Find a firm that specializes in just representing
tenants. This should be possible in most major cities and suburbs, but tougher in smaller
areas where brokers try to do it all. If you’re a larger company and have offices in
multiple locations a number a firms specialize in a very sophisticated set of services
designed specifically for you.
Second - Get a written commitment that the broker has no
conflicts of interest and will represent only your business. Listen carefully for,
“we have effectively represented both parties for many years,” “we have a
way to handle that,” “no conflicts of interest at the present time.”
Third - Checkout their track record and references. Tenants
who have had a good experience with a Tenant Representation broker will be happy to talk
about it, because it is a unique experience.
Fourth - Review their tools and services to ensure what
they have to offer are what you need. Tools might include strategic planning, lease
comparison analysis, lease vs. buy investigation, project timeline management, preferred
vendor recommendations, move management, and project and/or construction management.
Fifth - Make sure the tenant representatives working on
your account are in fact knowledgeable and experienced in relocating a firm like yours.
The good news here is that most of these firms have very experienced personnel and a
strong commitment to service. |
