With the commercial real estate market tilted in favour of tenants, you might wonder, “Do I really need a Tenant Rep?”
Here’s why appointing one still makes all the difference.
Tenant Reps, also called Tenant Advocates or Tenant Representation Specialists, are the unsung heroes of commercial leasing. They offer commercial tenants independent, expert, and conflict-free advice.
Unlike real estate agents (who primarily work for landlords), Tenant Reps are firmly in a tenant's corner, ensuring they secure the right premises while locking in the most favourable terms at the best rate.
Commercial tenants are well and truly in the driving seat.
Over the past few years, vacancy rates across the nation have soared, driving up incentives and sparking intense competition amongst landlords.
However, despite a landscape ripe for amazing deals, commercial tenants who handle their own negotiations still pay more over their lease term. That's because Tenant Reps know the difference between a good and GREAT deal and how hard we can push.
Moreover, since we're in uncharted territory, anything is negotiable, and there are no benchmarks. Recently, our team has successfully negotiated tenant-friendly clauses, including make good removal, Force Majeure insertions, no annual increases, and early termination.
When it comes to lease negotiation, some obvious terms need to be ironed out, such as rent and lease duration. However, many commercial tenants don't know that nearly all the clauses in a commercial lease are open to negotiation - that's over 50 points! And when seemingly irrelevant clauses are overlooked, they can become major problems down the line.
This is where Tenant Reps excel. As professional negotiators, we take the time to learn about your business objectives so that we can structure the deal to suit.
There are more listings online than you can poke a stick at. But much of the information you see is inaccurate, leaving you with the arduous task of calling around to verify listing availability and details. That’s hours and hours of work!
A Tenant Advocate has the network and expertise to identify and qualify leasing opportunities from the entire market (including off-market options). If you give us your parameters, we'll do the legwork to show you everything that suits.
We'll also suggest ways to optimise a space to lower your average rent psqm without compromising on your business's productivity and efficiency.
"Time is money."
This old saying certainly applies when it comes to leasing new office space.
Searching for commercial space, getting to grips with market trends and negotiating leasing agreements is complicated, often burdening your company’s time, money, and resources.
Tenant Reps streamline this process by:
Most tenants don't have the time or knowledge to thoroughly research current market rental rates and lease terms.
Tenant Advocates do this for a living.
They also have the necessary skills to negotiate a fair and competitive lease that aligns with market conditions (using metrics like the type of commercial property, location, landlord type, building vacancy rates, fit-out costs, incentive levels and the market outlook).
Tenant Reps manage every detail and advise clients on the lowest-risk strategy to ensure they never face unexpected and costly surprises.
So, just as you would hire a solicitor to deal with your legal matters and an accountant to deal with your taxes, your real estate project should be handled by professionals who work for you.
Tenant reps play the bad cop, securing you the best deal while you maintain or build on your relationship with your landlord.
If you're dealing with a real estate agent or broker, remember this: They do not work for you; they work for the landlord. While these agencies may have a 'dedicated department' for tenant representation, building owners employ their firm to fill their vacant space on favourable terms.
To put it into perspective, according to PCA, in Sydney CBD alone, the top five agencies with an in-house tenant rep division are also currently leasing 350K+sqm of the total circa 500K+sqm of vacant space. So, while they may also represent tenants, the majority of their work is still done on behalf of building owners.
An independent Tenant Rep does not have a portfolio of leasing opportunities, which means they are property neutral. We'll show you all options – on-market, off-market, assignment and sublease opportunities – from all agencies (including CBRE, JLL, Colliers and Cushman & Wakefield) and enter negotiations with a tenant-centric focus. We’ll endeavour to negotiate the best possible deal for you, provide impartial and honest advice and break down confusing language.
What’s more, these days, every transaction sets a new bar. And in today’s climate, anything is negotiable; the devil really is in the details, and outcomes rely heavily on the experience you bring to the negotiating table.
There's no denying it; competition is rife.
But there's really only one way that landlords (and their investors) measure success: by filling their vacancies with quality tenants. So, in our experience, we've found that if we can bring a great tenant, most landlords will be more than happy to pay our fee – no conflicts of interest.
That frees you up to funnel your limited capital into what matters most: your business.
You may think you've got the upper hand at the negotiating table, especially in this market. But most landlords go into negotiations believing themselves to have the greater leverage. And they typically will if there's an agent on their side and you go at it alone.
That's because agents have an information advantage. They bring expert knowledge of buildings, markets, trends, and upcoming stock and typically undertake multiple negotiations daily.
So, if you're unrepresented and not an expert negotiator in commercial real estate, you'll be at a disadvantage.
What's more, negotiating a commercial lease takes months and involves managing multiple offers, sifting through complicated jargon, and navigating seemingly small but significant clauses that can impact you down the line.
Working with a Tenant Rep simplifies this process for you. It also means you have someone on your side who is a property expert and a skilled negotiator- and this levels the playing field.
A Tenant Rep’s main objective is to extract savings and secure flexibility for their tenants. One way that they do that is to create heated competition between landlords by:
Even if your heart is set on lease renewal, a Tenant Advocate will explore market options to create competition and ensure a backup option.
In today's market, landlords will go to lengths to retain sitting tenants and secure new tenants. So, if they're left thinking that you're looking at multiple properties with a Tenant Rep, they’ll be more willing to negotiate the asking rate, flexible lease terms, a greater incentive or tenant-centric clauses.
While the market may seem like a tenant's paradise, having a commercial Tenant Rep on your side is still the key to unlocking the best deal.
So, if you're navigating the complex world of commercial leasing, consider the invaluable assistance a Tenant Rep can offer. From saving you time to securing your company the best terms and rates, a Tenant Rep's role is as crucial as ever.
Book a call with our team today to explore how we can help you secure a cracking deal for your business.
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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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