What is Tenant Representation?
Tenant Representation is a title used to describe services that commercial real estate brokers provide to companies. These services can include: 1) acquiring office space through lease or purchase, 2) blending and extending a current lease, 3) renewing a current lease. The broker owes his loyalty solely to the company he represents.
Why do I need a broker?
Sellers and landlords almost always use a broker to represent themselves in a sale or lease negotiation. Buyers and tenants should do the same so they can stay focused on their core business while a professional handles the real estate needs. Tenants will often save up to 15% when using a broker rather than negotiate for themselves, especially on renewals. They often will get other benefits like higher tenant improvement allowances and more lease flexibility. The broker’s fee is paid by the seller or landlord. Brokers with Lee & Associates Chicago regularly network with other local brokers and landlords to maintain business relationships with these people. In doing so, real estate transactions tend to move smoother and quicker.
Can’t I negotiate my own lease?
Sure, but why would you? The commissions are built into the rent structure so wouldn’t it make sense to get the benefit? In addition, you should spend your time focused on your core business. Most business people are experts in their businesses and not in real estate. So remaining focused on their core business while having a free commercial real estate expert handle the real estate seems to be the best solution.
Should I have my attorney review the lease?
Definitely, and be sure it is an experienced commercial real estate attorney. Some attorneys are great litigators, but you wouldn’t want them negotiating a lease. Attorneys specialize just like most other businesses so use the one best qualified to handle a purchase or lease.
Who pays Lee & Associates?
For leases, the landlord pays Lee & Associates. The commission is built into the rental rate that the tenant pays so it is important that the tenant use a tenant broker to help them with the negotiation and someone looking out for their best interest. For purchases, the seller typically pays the commission, but that is not always the case for large commercial deals. In those unusual cases, Cawley Chicago’s commission can be built into the offer price to make it easy.
How far in advance should I start planning a renewal or move?
This depends on the size of the space needed and how specialized the use. Tenants should start working with a broker anywhere from 6 months to 2 years prior to expiration. This allows plenty of time to understand the future of the company, the role that real estate should play in that future, search the market for all options, and negotiate the terms of the deal and then document that deal in a lease.
How is Lee & Associates different from the Brokerage Firms?
Lee & Associates is a group committed to becoming market experts of their exclusive geographic and product territories. With a flat organizational structure and a fully empowered team, we seek to understand the vision of our institutional and private clients for their office needs. Using our proprietary four-stage process, maintaining the exchange of information in an open, collaborative environment leveraging and integrating diverse levels of expertise, educational backgrounds and experience.
How much space will I need?
Prior to searching the market for the right office we will work with you to determine your companies approximate square footage needs. If you are unsure a good rule of thumb is approximately 225 square feet per person. If long or even short term growth is a concern we can ensure those needs are met during the negotiation process.
What if I want to renew my current lease, do I still need a broker?
You do not have to hire a broker, however most renewal options that Tenants have built in to their lease does not account for the current market business terms and items such as free rent, tenant improvements and other incentives. Hiring a broker to assist in the renewal process not only will save you money but ensure that your space is kept up to date and maintained for both your employees and clients. Lee & Associates stays abreast of all market transactions so that clients benefit from recent sales and lease data. Keeping this knowledge current ensures clients get the best deal possible.
Who else do I need to hire?
Lee & Associates has a team of professionals, including architects, designers, attorneys, contractors, furniture vendors, IT companies and bankers, to ensure each aspect of the transaction is risk-free and runs smoothly for clients.
