If you don't have the time or experience to navigate commercial real estate complexities, you might be wondering what a Tenant Rep is and the benefits of using one.
Tenant Reps, also known as Tenant Advocates or Tenant Representation Specialists, offer independent, expert and conflict-free advice to commercial tenants. Their advice primarily focuses on searching for site(s), lease negotiation and agreement, project and portfolio management (and more).
Across the Eastern seaboard, the power has shifted, and tenants are in the driving seat.In Sydney, for instance, the vacancy rate jumped from 3.9% to an average of 8% in the Sydney CBD by EOY. And it now hovers between 5-7% in Melbourne, depending on submarket and location, driving rents down and incentives up. (You can learn more in our latest market update.)
Despite this positive outlook, in our experience, commercial tenants who handle their own negotiations pay circa 22% more over their lease term. So, it pays to team up with a tenant rep.But these days, there's more to negotiate. In fact, many tenants don't realise that there are over 40 points of negotiation. And when seemingly irrelevant clauses are overlooked, they can become major problems down the line.
What's more, since we're in uncharted territory, anything is negotiable, and there are no benchmarks. Recently, our team has successfully negotiated COVID-friendly clauses, including make good removal, Force Majeure insertions, no annual increases and early termination. Even greater reasons to partner with a professional.
Most tenants don't have the time or knowledge to thoroughly research current market rental rates and lease terms.Tenant Representatives do this for a living.
They also have the necessary skills to strategically negotiate a competitive commercial lease that is fair and falls in line with current market conditions. Tenant reps use metrics like type of commercial property, location, landlord type, building vacancy rates, fit-out costs, incentive levels and the market outlook to secure you the best possible deal.
A Tenant Advocate will have the experience, knowledge and expertise to identify and qualify suitable leasing opportunities from the entire market, including off-market options available but not actively marketed. Commercial real estate offers many options to the astute expert.
What’s more, once you’ve found a suitable space, there are many ways to optimise the way you use it. A Tenant Rep will lower your average rent per square meter without compromising your business’s productivity and efficiency. They will analyse your business needs and help you to identify all layout requirements suitable to your company culture and working style.
This old saying certainly applies when it comes to leasing new office space.
Searching for commercial space, getting to grips with market trends and negotiating leasing agreements is complicated and often takes longer than expected. Such critical tasks can place an enormous burden on your company’s time, money and resources. Tenant Reps remove the hassle and time-wasting while applying expert knowledge to every critical task.
They do this by:
That's how using a Tenant Rep will save you time, hassle and money; they always leave no stone unturned.
Just as you would hire a solicitor to deal with your legal matters and an accountant to deal with your taxes, the real estate process should be handled by professionals who are on your side.
Tenant advocates understand all the potential dangers and complexities of leasing transactions. These pitfalls could magnify if you try to navigate the lease negotiation process on your own. Engaging a tenant advocate who understands the ins and outs of commercial leasing agreements, trends, tenant rights, jargon (and much more) is crucial.
A Tenant Representation Specialist takes the responsibility of managing every detail and advises clients on the lowest risk strategy to ensure that you never face unexpected and costly surprises.
There's no denying it; competition is rife. But there's really only one way that landlords (and their investors) measure success, and that's through occupancy. In our experience, we've found that if we can bring a great tenant, most Landlords will be more than happy to pay our fee – no conflicts of interest. That frees you up to funnel your limited capital into what matters most: your business.
If you’re dealing with a real estate agent or broker, remember this: They do not work for you; they work for the landlord. That means they don’t have your best interests at heart.A Tenant Advocate, on the other hand, works for you. They’ll endeavour to negotiate the best possible deal for you, provide you with impartial and honest advice and break down confusing language.What’s more, these days, every transaction sets a new bar. And in today’s climate, anything is negotiable; the devil really is in the detail, and outcomes rely heavily on the experience you bring to the negotiating table. (Read more on why using a Tenant Rep is more valuable than ever.)
Tenant CS is a tenant advisory service that caters to companies across Australia, Singapore and the greater Asia-Pacific region. We have offices at the heart of the Sydney CBD, as well as in Melbourne and Singapore.
Get in touch with our team today for expert advice with your next lease negotiation!