What is a ‘tenant rep’ and what do they do?
For many businesses, finding or relocating to a suitable office space is a matter of great importance. However, not many tenants of commercial property are experienced in how to save time and still negotiate to get the best deal. A tenant representative, or 'tenant rep', can perform a valuable service to tenants of commercial property.
The tenant rep is a commercial property professional who works exclusively for the tenant.
What will the tenant rep do?
The tenant rep is a commercial property professional who works exclusively for the tenant. Before a commercial tenant appoints a tenant rep, it would be wise to have a basic understanding of what one does. One important function of a tenant rep is location analysis – do you stay or go? You may wish to stay in your current office or evaluate the options to determine if your business is best to go to another office space. Either option needs to be considered and financially evaluated for an informed decision to be made.
I am not sure if I want to Stay here or Go to new space?
In the case that a relocation is the best option for a commercial tenant, the tenant rep can act as the advocate for the business owner in negotiations with the landlord of the new office space. An ideal representative will have expert negotiation skills, which will encourage a favourable outcome. The very fact of having representation can give a tenant leverage in negotiation, which you likely would not have otherwise. It is also important that an experienced tenant rep will be operating without conflict and therefore from a position of independence, further adding to the potential benefit of representation.
Heads of Agreement and Lease Documentation – what is it all?
Documentation can often be complicated and potentially result in unforseen expenses over time, especially for a tenant without consistent knowledge of commercial lease negotiations. A tenant representative will have a thorough knowledge of which documents are required, how to tailor them for your requirements, and protect your position as the tenant.
That all sounds great so what else is important?
For all the benefits of working with a tenant rep, there are a few precautions to take when selecting one to represent you. A tenant rep must first be free of any conflicts of interest when working with a tenant. Second, a tenant must understand how the rep expects to be paid, and by whom. The tenant rep must also to be able to prove that he is knowledgeable about current market conditions, and has a good reputation among his peers in the same industry. If a tenant takes these steps in selecting a tenant rep this is a positive step forward in creating substantial savings for the tenant’s business.
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