Tenant Advocacy Tips for Commercial Real Estate Agents
In commercial real estate agency ‘Tenant Advocacy’ is a real business opportunity for some agents. In essence the tenant is your client and they pay your commissions.
If this work is attractive to you then understand one important fact; only work for the bigger and more ‘corporate’ clients. They will have the larger leasing need and they will quite likely be prepared to pay for an expert to help them in finding a quality property to lease for their business.
In an ideal world these tenant types are useful targets for tenant advocacy work:
- Manufacturing businesses
- Special Warehouse and manufacturing
- Bulky goods warehouse
- Regional logistics businesses
- Warehouse and storage facilities for a larger corporation
- Head office businesses under the pressure of relocation
- Corporate head quarters
Essentially you can work for any large tenant that has a specific property need in location, property type, or property size.
When you work with the larger tenants the fees for the leasing appointment are potentially larger. Your property brief is also from a tenant perspective so you can help the tenant choose the location and the lease package to be negotiated.
Some corporate groups will have a specific process of property selection and approval. As the ‘tenant rep’ you can get closer to the tenant decision facility and the particular property need.
No longer are you chasing the ‘highest and best rent’ for a landlord, but you are negotiating a low rent start on a longer lease term to suit the client (tenant) business.
All of your leasing skill is now working for the specific needs of your tenant. That says you should fully understand their business and exactly what property type will work for them. You can ask questions about:
- Expansion needs
- Property location
- Property use and size
- Warehouse and hardstand use
- Office space requirements
- Services and amenities
- Staff numbers and tasks
- Department interactions for fitout requirements
- Car parking
- Rental budget
- Outgoings budget
- Ideal lease initial lease term
- Available options for further terms
- Make good requirements
- Fitout plan requirements
- Architectural design
- Branding and signage
- Permitted use
- Rent review requirements
- Low rent starts
- Incentives available
So the list is long and specific. Some agents do very well as specialised tenant advocates and representatives. Stick to the larger tenants with this service and you will do very well as an agent.
Some final rules to the process! Get your client appointment signed before you start looking for properties to lease and only do the work on an exclusive agent basis. When you find a potential property make sure that the tenant has not inspected it earlier with another agent.
