April 19th, 2013, By Don Catalano
At the end of the day, your company is the one signing the checks for its corporate real estate portfolio. You take responsibility for managing the spaces, handling the expenses and planning the cash flows, but you aren’t alone. Nowadays, most companies utilize the services of a Tenant Rep real estate broker to advice them and provide real estate market intelligence. Utilizing their services and the following strategy, you can start the optimize your commercial real estate portfolio so that you are saving your company money while saving yourself time.
If you’re not on the ground in a market, it’s hard to tell what’s really going on. The space that you leased five years ago because it was in the best building in the best location may now be tired and undesirable. Your tenant rep keeps his or her finger on the pulse of the market and can give you an unbiased third-party view of what is happening with your space relative to the market. Ideally, your tenant rep should advise you on:
While you can probably pull lease comps yourself to get a sense of asking rents in your market, your tenant rep has inside information on where deals are actually getting done. This can help you gauge what your rents may do in the future when your lease rolls as well as giving you ammunition for negotiations with your landlord if your lease is out of alignment with the market. Your tenant rep can also help you analyze your CAM costs to ensure that they are in-line with what other tenants of similar space are paying in your market. Your landlord has this information. Why shouldn’t you?
Many tenant reps can connect you to full-fledged property, project and asset management teams that can handle just about any aspect of your tenancy. These services usually cost money and may duplicated what you’re already doing as an in-house corporate real estate department. At no cost, it’s reasonable to expect your tenant rep to track crucial dates in your lease and keep you informed. Doing this is in the tenant rep’s interest, since those crucial dates are usually opportunities for more business with you. While you shouldn’t completely depend on your tenant rep for this, it’s still valuable to have another set of eyes watching your lease calendar, just in case.
When your lease is coming up, your tenant rep comes into his or her own as a resource — connect you to new spaces, help you renegotiate your option with your landlord, and help you find resources to help you with the nuts and bolts of relocation. Many corporate services brokers will go as far as booking hotels for you so that you can be close to where you need to be. In an unfamiliar market, small things like this can make a big difference in making your site survey trips more efficient and effective.
It’s your tenant rep’s business to know what is going on in the commercial real estate market. This includes paying attention to what tenants are doing. To this end, your tenant rep can frequently be a good source of intelligence about what your competition is doing. While she or he can’t violate any confidences, you might be surprised what can be delivered when asked.