Do you remember your school formal? Most people came partnered up, but the ones who went solo had the most fun.
Why? Because they didn't have any preconceived ideas of who they'd spend their night with. They weren't confined to their date's circle of friends. Instead, they mingled and might have even tempted someone else's date away, creating a competitive environment.
That's how we want you to think of approaching your next lease term.
Resist speaking to a traditional leasing agent because you'll be limited to their 'circle of friends.' And don't go into the process with preconceived ideas of the outcome, location, workplace style or fit-out type. Instead, keep an open mind and take advantage of any opportunities that arise.
The property market is buzzing with sublease and direct leasing options. And there are no chaperones at this ball. So why limit yourself to just one agent's circle of friends?
Working with a Tenant Representative will help your company navigate the crowded dance floor and unearth the best outcome for your business.
Elevate your lease game and get ready to dance. Here are five reasons why Tenant Representatives are more valuable now than ever.
Competition is fierce. But there's only one metric that the Landlords (and their investors) care about: occupancy.
Nine out of 10 landlords are more than willing to pay tenant rep fees as long as we bring them a good tenant. That means you can keep your hard-earned capital in your business - where it belongs - rather than having to pay consultants. No conflicts of interest or hidden charges.
Smart companies are taking the reins and considering their future property requirements before making any big moves. The rise of remote work has also prompted many multi-city clients to reevaluate their office footprint, leading them to explore new options.
Agents keep some of this stock unadvertised, so they don't have to split commissions with other agents. However, as Tenant Representatives, we have the inside scoop on both on and off-market opportunities. And more options equals more competition, which leads to better results for you!
The workplace has undergone significant changes, with shifts in headcount, remote work, and the rise of video conferencing all affecting the amount of space businesses require. But don't be fooled; this doesn't necessarily mean less space is needed.
On the one hand, technological advancements and new ways of working may decrease the amount of space needed, such as introducing shared workstations, satellite sites or fewer meeting rooms. On the other hand, the push to get people back into the office and to make the office experience meaningful may increase space requirements (think collaboration zones, zoom-rooms and social distancing).
Businesses must navigate these changes and find the perfect balance to meet their evolving needs. Tenant Representatives help make this process seamless and stress-free.
Tenants are unintentionally causing the decline of commercial rents and the improvement of incentives. That's because, with every sublease opportunity, a landlord has to re-forecast their pricing expectations to compete.
Commercial tenants who are subleasing excess space will have written off the liability from their balance sheet. And any added income generated (from a sublease, sale of a fit-out or getting out of makegood obligations) is a bonus.
Put simply, tenants are offering up spaces to the market, and they have nothing to lose in the process. For sublessees, what's great about subleasing space is that:
Subleasing is the new competition for landlords. In fact, the best deals we’re doing are in the sublease market, where tenants are offering up heavily discounted space to get out of their lease tail.
Landlords are competing by taking advantage of the low cost of capital and offering better end-of-trip facilities, foyer upgrades, spec fit-outs and financial incentives. We’re also witnessing a shift in behaviour as more institutional landlords are reclaiming their properties, preferring to leave them vacant at market rates rather than allowing them to sublease at 50% of the market rate.
Despite the great deals out there, keep in mind that subleasing has inherent risks for the sublessee. The head lease constrains your ability to negotiate lease terms, and the fine print in the contract that your sublessor provides could place your business at risk. So, if you are looking to sublease, engaging a Tenant Rep is worth it to reap potential rewards and minimise your risk.
It's undoubtedly a tenant's market. The landscape is competitive, and landlords are more flexible than they've been in years. But limited options and a lack of market knowledge can still keep tenants from securing the best deal.
That's because there's more to negotiate than just incentives and rent.
Negotiating flexibility and other tenant-friendly aspects - such as no annual increases, the removal of makegood clauses or the option for early termination - can be just as important. And working with a tenant rep will help you do this by rebalancing the scales in negotiations and ensuring that your lease agreement aligns with your business needs and objectives.
At one point in time, the cost of moving and a new fit-out would deter tenants from relocating. But now that size requirements are circa 20%, rents are lower, and incentives are higher, this is no longer the case.
With the right advice, some tenants can relocate, install a new fit-out, and still pay less. But in commercial leasing, there are also over 40 points to negotiate. So, even in a tenant’s market, it pays to get a professional on your side.
For the above reasons (and more), getting an experienced and dedicated tenant rep is more important than ever to secure you the best deal, favourable terms and flexibility.
Get in touch with our team today to see how we can help you!
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We acknowledge the Traditional Custodians of the lands on which we work. Our offices are located on the land of the Gadigal peoples of the Eora Nation and the Wurundjeri peoples of the Kulin Nation. We acknowledge their continued connection and contribution to land, water and community, and pay our respects to Elders past and present.
We’re proud to be an inclusive workplace, where diversity in all its forms are valued and every member of our team is encouraged to bring their whole self to work.
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