Now's The Time to Use An Experienced Tenant Representative

Today's economy is placing tremendous pressure on commercial landlords, which is presenting an opportunity for office, industrial, and retail building tenants to secure lease terms that haven’t existed since the early 90’s.

Similar to the mess in the residential market, many of today's commercial landlords are on a sinking raft in a rising tide of debt needing to be re-financed. Yet, as the banking industry reels in its own crisis, lenders have been unwilling to step-in and provide commercial property owners with badly needed financing. Landlords are being put in a position of survival, while scrambling to secure enough rental income to service their current or future debt obligations. These conditions cause financially healthy tenants that need space as the most credible road to safety for a landlord with available space. Needless to say, this, in turn, puts those tenants in a position to have substantial leverage when negotiating the economic and business terms of a building lease.

That is where a good tenant representative, a commercial broker who only represents tenants and buyers of commercial property, can add a tremendous amount of value in the leasing process. Landlords are unlikely to provide prospective tenants with a picture of their or a property’s financial health. A knowledgeable and experienced tenant representative should be able to provide a solid analysis of a property's financial picture and use the building's need for stability as way to craft a fair but very tenant-favorable lease.

Be cautious, however, of brokers that claim to represent tenants only, yet, work within firms that provide services to tenants and landlords alike. It's possible that these brokers and their firms may have more than “one dog in the fight”, so to speak, which can ultimately place tenants they represent at a severe disadvantage in the lease negotiations process.

Over the past few years, I observed instances where landlords rewarded brokers and their firms for representing large tenants to the landlord’s building with a listing contract on the building or another of the landlord’s buildings. Needless to say, the potential for conflict of interest is great, which is why my firm, Carmen Commercial Real Estate Services, and its professionals will only represent commercial tenants and will not represnet building owners. Our efforts are focused exclusively on representing firms that are searching for office space and negotiating new lease or lease renewal terms.

The bottom line is this: it's a tenant's market. And even though the economy has stacked the jury on behalf of tenants nationwide, the importance of proven, un-conflicted tenant representation should never be overlooked.