“Top 5 Reasons for Dedicated Tenant Representation” by Bo Barron, CCIM

The guy that came up with Supply and Demand was either incredibly smart or incredibly lucky. Adam Smith was definitely smart. Supply and Demand drives everything in real estate, and the same holds true for leasing space. How much space is available? How many active tenants are in the market competing for the space? Does it matter?

It absolutely matters. What tenants need to understand in this market is that competition for their tenancy is fierce. Nationally, there is more office space vacant than any time since 2006 and transactional activity is down 40%. Translation: tenants aren’t moving or expanding. This means that tenants who do need to expand or relocate should have landlords salivating over them.

But is this happening? No. Tenants tend to negotiate in silos – meaning they will deal with one landlord at a time eliminating competition that will work in their favor. So here are 5 reasons why dedicated tenant representation is in a tenant’s best interests.

1. Strategy – You do not win a leasing battle without a strategy. An advisor specializing in tenant representation will seek to understand the tenant’s objectives, relationships, and expectations.

2. Analyze – After understanding the strategy, a tenant rep advisor will conduct a detailed needs analysis to comprehend space needs, growth plans, budget, and location and building requirements.

3. Market – This is where the fun begins! A tenant rep will then create a market for the tenant’s business by conducting a market study, conducting property tours, developing an RFP, and inviting the identified landlords to bid for the tenant. This step ensures competition is working for the tenant keeping costs low and incentivizing landlords to give their best deals.

4. Occupancy – Now the tenant rep will conduct a comparative lease analysis from the RFP responses, negotiate the lease, and walk the tenant through the final steps to occupancy.

5. Cost – Tenant representation is virtually free for the tenant.

So should you consider dedicated tenant representation? Why would you not?