Some of us have worked in ‘tenant advocacy’ and particularly leasing. It is the reverse normal client process where you are potentially to be working for the tenant in finding the right premises and right location.
It is a very lucrative part of the property leasing market if you work in a larger town or city. You should also work only from a specialist perspective with the larger corporate tenants.
So here is a fundamental rule if this is to be a part of the property brokerage and leasing market for you:
‘Work only on the leasing requirements of larger corporate tenants with their business needs.’
Size really does matter if you are to be a tenant advocate in a specialist way. It is a simple rule and it comes about on the basis that:
- Corporate tenants are open to seeking and having professional help in finding new premises for their business.
- Larger businesses are receptive to paying good commissions for quality leasing services to be provided. That being said, you will need to provide experience and market knowledge to help with their property selection and leasing requirement.
- Most corporations do not have property specialists in their employ that have the time or the experience to find premises to occupy.
- Tenants of this type will not flinch at signing an agency or broker appointment to act on their behalf providing they can see that they are working with a true property specialist for the property type and location.
- You can work with the other specialist consultants such as engineers, architects, and property development specialists to find the right property for the tenant in relocation.
- Many of the corporate tenants today look for quality premises in prime locations and quality buildings. On that basis the rental will be high and your subsequent fees similarly large. Your fee should be based on the lease result and that will include the term of the lease and the amount of rental.
- Your job would be to find the right premises in the short list of potential property locations. You then need to provide the right services and protect the tenant as part of the lease negotiation and rental outcome. This is of course the reverse to the normal client landlord relationship. Your job would be to negotiate the lowest and fairest rental for the best property that suits the tenant’s requirements.
Don’t waste time with the smaller tenants in the leasing market on this basis, given that the commissions and fees that we receive are usually charged on the achieved level of rental. When you work with smaller tenancies with lower levels of rental, the fees for the work involved can be negligible. Some of the smaller leasing transactions are as much work if not more than the larger property transactions. Focus on the market segment that pays you well.
So this can be a lucrative part of the property market for you as a broker or an agent specialising in leasing. This doesn’t mean that you overlook the traditional leasing work and the services provided to landlords. Tenant advocacy is simply a variation on services provided. You will however require specific marketing packages designed for the tenants that you could serve. To help with that process, here are some of the typical factors of needs analysis that apply to tenant advocacy services. They can help you in securing a new property for your tenant client:
- Staff – every business will have particular needs when it comes to staff function and business operations. You will need to know how the business operates around staff and customers. The property will have configuration requirements to serve both. If the business is currently operating from other premises, you can visit the location to identify strengths and weaknesses of occupancy.
- Timing of the changeover – every business will have an ideal time to relocate. That time frame will have something to do with their market share and customer interaction. Take the time to understand the best methods of property procurement and lease negotiation. Also understand the ideal times for the commencement of the new lease in the new location.
- Customers – some businesses have particular customer needs. They will include car parking, services and amenities, reception areas, common areas, and frequency of access. A business with a large customer base will likely have a very specific focus on customer comfort and customer support in property layout and design. The property will need to integrate around those factors.
- Expansion and contraction – many businesses will have a requirement for expansion and or contraction over the years. In a long lease these factors will need to be considered by the tenant and integrated into the lease negotiation. Whilst it will be nice for the tenant to have option alternatives as part of extending the lease structure in the future, look at the rent review profiles and the options structures as they may or may not suit your tenant client. As a tenant advocate, your job is to negotiate a workable lease for your client as the tenant. Consider the future of the business and how you can improve the outcomes of lease negotiation for your tenant.
- Areas of occupancy – there may be certain special demands on areas of occupancy for the tenant. Floor plates, special zones such as warehouse and office area, will all have occupancy factors and challenges to consider. You may need to work with the architect consultants for the tenant in understanding fit out design and property usage.
- Permitted use – the permitted use for the premises should be in sympathy with and compliant to the local property zoning. The lease will also be designed around factors of permitted use and property occupation. You can provide assistance to the tenant in achieving the most workable lease for their future occupancy.
- Budgets and lease terms – every tenant will have certain limitations when it comes to a rental and occupancy budget. You can help with a negotiation for the tenant by limiting their exposure to aggressively structured landlord rentals and occupancy costs. A clear understanding of market rental conditions will help you in achieving that. You should also have a good working knowledge when it comes to rental strategies and structures.
- Services and amenities – the tenant will have particular requirements regards services and amenities, together with the use of improvements within the premises to be leased. Working closely with the tenant as part of tenant advocacy will help you understand those requirements and how they will integrate into a selected property to lease.
- Location – Larger corporate businesses today will have a specific location suited to their staffing structure, and customer base. Factors of transport, communication, access to raw materials, services, and supply will all have an impact on the ideal location to be selected or short listed with lease potential. Work closely with the tenant to understand their priorities in this way.
So there are some very specific things that you can do here; that is with and as part of providing a specialist tenant advocacy service. Take the time to fully understand your tenant as a client, make sure that they are suitably large for the services to be provided, and get them to sign a legal agency appointment before you spend any time on the professional leasing engagement.