In many situations, whether their intention is to “save money” or “save time,” tenants avoid hiring commercial brokers. However, they’re missing out on the best-kept secret of the CRE industry: your broker.
Reasons for Hiring a CRE Broker
For some, it might be intimidating to hire a commercial real estate broker. (Or client advisor, as we also refer to them at Voit Real Estate Services.) In many cases, people think that by not hiring a broker, they’ll save time and money. However, quite the opposite is the case.
So, why use a broker to represent tenant interest? Here are some reasons why you might hire a commercial real estate broker of your own.
- Saves Time: A broker can review needs and compare potential locations to eliminate options that don’t fit or are unwanted solicitations.
- Creates Competition: Shows all available properties to meet requirements, notifying the landlord of opportunities.
- Knows Potential Issues: A broker can protect the tenant by navigating negotiation pitfalls.
- Is an Impartial Third Party: Keeps their emotions out of the transaction, fully representing tenant interests.
- Identifies Preliminary Pricing: Ensures tenant improvements are maximized in allowance from the landlord.
- Frees Up Time: Commercial real estate transactions are time-consuming, requiring constant attention. When a broker takes care of this, it gives tenants more time to focus on their business.
When it comes to approaching lease expirations, a broker can help:
- Define objectives
- Understand the strengths and challenges of a situation
- Develop an in-depth strategy ahead of time
- Create leverage within the marketplace
- Initiate negotiations
- Procure advantageous outcomes
Visit this blog post for more information on whether or not you need a CRE broker and how one might benefit your real estate goals.
It’s Time to Debunk Some Myths
Myth #1: “I don’t need a CRE broker. I don’t need advice. I’ve been through this process before.”
Debunked: Although you might be familiar with the real estate acquisition process, tenants who are represented by real estate brokers give the impression to landlords that they’re serious about relocating. Chances are, with a commercial broker by your side, you’ll be taken more seriously in your property search.
Without representation, property owners might classify you as a “Lookie-loo.” Hiring a broker sends the right message to property owners—that you’re serious—and will motivate the landlord to offer the most competitive rate.
Myth #2: “If I use representation, my landlord says that my rent will increase.”
Debunked: Whether or not a tenant has representation does not matter in terms of rent increase as the full commission is accounted for regardless. The truth of the matter (if you’re concerned with the commission fee) is that a quality broker will save more time and money than the commission paid.
Finding the perfect commercial space for your business doesn’t happen overnight, and with every second that passes, your losses increase. Brokers have access to database information, are experts in negotiation, and work to understand precisely what you’re looking for.
Myth #3: “I don’t need representation. My landlord likes me enough and has shown me market comparables.”
Debunked: Landlords are in the business of making money also. As a result, landlords will likely only show comparables that work for their direct benefit. This considered, it is necessary to seek representation in order to receive a comprehensive overview of marketplace trends and activity.
Tenants need advisors that they can trust and brokers who find comparables that favor the tenant’s position.
Myth #4: “Seeking representation is unnecessary and inconvenient if I am simply making the decision to renew my lease.”
Debunked: The opposite is actually true. By seeking representation from an experienced broker you gain leverage yourself as a tenant to receive a fair transaction. Even if you are making the “simple” decision to renew your lease, seeking representation ensures you get the best possible terms.
As we’ve outlined, tenants who fail to seek representation miss out on the best-kept secret of the CRE industry. At Voit Real Estate Services, we attribute our success to our brokers. With more than $53.5 billion in brokerage transactions, we’re confident in the strength of our brokers.