Frequently Asked Questions


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  When is the right time to begin looking for new space?

It depends on the market conditions and the size of your requirement. Typically, in a stabilized 90% occupied market, the best time to begin looking for a 1,000-5,000 SF requirement is 3-6 months before your lease expires; for 5,000-15,000 SF requirements, 6-12 months; and for requirements in excess of 15,000 SF, 12-18 months is the most effective time frame. When tenants have time on their side, they are not at the mercy of landlords and are not considered by them to be a "captive audience". The best deals are struck far in advance of the target lease commencement date. Many corporate executives miss the proverbial boat and all the potential incentives because they have begun negotiations too late in the process and have lost their position of strength. When landlords know your timing is tight they will almost always exploit this perceived weakness and capitalize on it by demanding their asking terms and being inflexible when negotiating the lease document.

 

  If there are fewer brokers, won't I get a better deal with the landlord?

Actually, no. Tenant Representatives and co-brokers simply share in the landlord's agent's fee, which is already built in to the building's operating expenses. In fact, brokers for the Tenant can typically negotiate much more favorable deals for the tenant because they know the building's vacancy and projected future vacancy as well as what incentives are being offered in other buildings in the same market. Additionally, when a prospective tenant is represented by a broker, the landlord knows that the prospective tenant is considering other options and that the landlord needs to be competitive with their rates and incentives. The prospective client ends up getting a better deal when working with a representative because the client is shown numerous alternatives and will benefit from the broker's many years of experience regarding market conditions and negotiation terms.

 

  Isn't the landlord's agent trying to get me the best deal possible so they will 'close the deal'?

Not really. The landlord's agent's job, enforced by a listing contract, is to get the best terms possible for the landlord. Landlords' agents can not simultaneously protect your best interest and not undermine their contracted client, the landlord. Many companies drive by buildings & respond to availability signs and solicit information from the internet. They think that by doing this themselves and not engaging an agent, they save money. In actuality, companies save money and time by utilizing the knowledge and experience possessed by a professional Tenant Representative.

 

  If I have a lawyer, why do I need a Tenant Representative?

Tenant Representatives have market knowledge which attorneys do not. Most leases are written by landlords and are very favorable towards the landlord. Attorneys primarily provide protection for the legal issues and often elect to remain uninvolved in the business terms as that is not part of their education and experience. A very important part of a tenant representative's job is to know the market conditions and to educate their client about the best business terms they can obtain. Also, a Tenant Representative can foresee issues that may not be apparent at the time, but need to be negotiated for future protection of the client. For example, Jason Stagman has years of experience negotiating business leases. He continually educates himself on what competitive terms different landlords are providing and he uses that knowledge to negotiate on behalf of his clients. Additionally, based on his extensive experience he can foresee what terms need to be addressed at the time of signing the lease even though they may not be relevant for several years.

 

  Can a Tenant Representative negotiate a renewal in our behalf with our current landlord?

Yes, sometimes. Sophisticated landlords often recognize and compensate Tenant Representatives when negotiating renewals because if the tenant representative relocates the tenant, the landlord's cost to acquire a new transaction will likely be much greater. Some of the landlord's costs include a full tenant improvement allowance to retrofit the space for a new tenant and a new use, rental losses during the marketing of the space and construction of the improvements, and marketing costs which may include a full commission as opposed to a lesser fee typical of renewal fees. Landlords almost always prefer to pay a modest commission to retain a tenant than to re-let vacant space. The clients, of course, benefit because they get the education of what other spaces are available, to know they have made the right decision to stay, and they get the knowledge of a Tenant Representative in negotiating the best terms on their behalf.

 

  I have two years left on my personally guaranteed lease. Do I have any negotiating room with my landlord?

Often you do. A landlord wants to keep a good tenant in the building. When push comes to shove, especially in a soft market, a landlord, under the right circumstances, will often grant numerous concessions to tenants in exchange for an extension of term. For example, if your building were 20% vacant, you occupy 10% of the building, have 1.5 years remaining on your lease, and offered to sign a brand new 5 year term now in exchange for a reduced rate, refurbishment including fresh paint and new carpeting, and a month free from rent, and assuming you were working with a Tenant Representative who is showing you alternatives in the market, your landlord would likely be inclined to grant you these provisions.

 

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