- May 24, 2018
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If you are new to the world of commercial real estate, you’ve probably heard the term tenant representative thrown around, and you may be wondering what that is. In short, a tenant rep, also referred to as tenant advisory or corporate services, is an agent whose sole focus is on the needs and interests of the tenant in a commercial real estate transaction. Whether or not you should use one is open for interpretation, but there are many compelling reasons that it is highly recommended. Read on to learn more about the many roles a tenant rep plays and how they benefit you, the tenant.
The first job of a tenant rep is to assess the needs of their client in an effort to help them decide whether they should relocate or renew an existing lease. This is done through a thorough examination of the pros and cons of each option based off of location, size of the property, the company’s budget, and any plans they may have to expand, among other factors. If the evaluation finds the tenant to be predominantly satisfied with their current situation, the recommendation will likely be to renew, unless the tenant rep has reason to believe that they may be able to save the tenant a significant amount of money through relocation.
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Finding the Right Space
Should it be decided that relocation is the next best step the tenant rep will get right to work searching for the new space that will be able to more adequately support the tenant’s needs. An experienced rep will use a variety of techniques to establish a list of available properties that fit the criteria put forth by the tenant. Once this information is gathered and the potential list has been narrowed down to between five and ten sites, the tenant rep will take the tenant to tour each property, citing the potential benefits and disadvantages to each based on their previous conversations. A good tenant rep will have done their homework on the property that they are showing and be able to answer any questions put forth by the tenant.
One of the top benefits of working with a tenant rep is their ability to work on behalf of the tenant to negotiate the best deal. Once a property is chosen, a rep will send a formal request for proposal, which outlines the basic terms the landlord is willing to offer. The landlord will likely not put forth his/her best terms in this initial correspondence and this is where a tenant rep comes in handy. Remember that a tenant rep is working solely on behalf of the tenant and will labor diligently to ensure that they have secured the best possible contract for their client. Based on the landlord response, a tenant rep will help their client to form a letter of intent (LOI), which is a counteroffer outlining reasonable and favorable changes in terms. Neither of these initial documents is binding, but they do offer the basis for negotiations to ensue. A tenant rep is invaluable in this process, as they understand the ins and outs of the commercial real estate market, thereby helping their client understand where they should make concessions and when they should continue to push for favorable terms. They won’t stop until an amicable agreement is made and the lease is fully drafted, reviewed, modified, and signed, with the help of the tenant’s legal counsel.
After the Contract
Once the lease on a commercial property is signed, a tenant rep becomes valuable in a whole different way. Chances are high that renovations in some form will have to be done. Though a tenant rep will most likely not handle this directly, they will happily give the tenant access to their network of reputable project managers, contractors, designers, and other industry professionals.
During the Lease Term
Once the lease is signed and the renovations are completed, a tenant rep and a tenant will likely continue their relationship. A skilled tenant rep will remain available and present to deal with any problems or issues that arise throughout the length of the lease. They will also be there at lease end to help the tenant renegotiate for an upcoming term, should they choose to stay on the property.
Looking for Tenant Representation in the Baton Rouge Area?
Now that you’re well-informed about what a tenant rep does, you have hopefully seen the benefit that working with a skilled tenant rep can offer you. At SVN | Graham, Langlois, & Legendre, LLC, we work tirelessly from start to finish to remove the stress of the real estate process from our client’s minds. You can find your next property knowing confidently that we are there to represent your interests and ensure that you get the best deal! Take a look at our available properties and contact a team member today to start searching!