We can create competition in the marketplace for your tenancy to pressure your landlord to offer the most favorable terms. With good relationships with Ownerships throughout the Southern California area, we can present our client’s as an asset to the building’s they may potentially occupy allowing for more favorable and often time, more favorable than market terms.
If your space is not working for you or if your current landlord in not presenting a favorable environment for your business, our team of expert leasing professionals will effectively create and leverage opportunities in the marketplace to secure the most advantageous transaction structure. Our team will advise you on strategy development and how to best leverage your tenancy in the market to achieve maximum value and flexibility.
Our brokers have an understanding to Leasing in that we will use creative approaches to evaluate unique opportunities, including off-market space options. Our relationships with local landlords and brokers allow us to negotiate terms that provide the best the overall economic position for our clients.
We provide our clients with a financial analyses summary which allows for an analysis of cost savings comparisons of space options being considered. Our clients benefit from an accurate budget for transactions and annual occupancy costs which allows for a better understanding and control of the lease structure.
What we are striving for throughout the Lease negotiation process is to make sure that we are establishing the most cost-effective, flexible, and functional occupancy solution for our client’s business environment. We furnish our clients with superior information and expert guidance to meet or exceed fiscal, workforce, and operational objectives for both current and long-term requirements.
Before proceeding, ask yourself these five questions.
First, do you have the time and expertise to research the real estate market, including opportunities that are currently available as well as those which are coming available in the future?
Second, do you know the market and the effective leasing rates in the area your area targeting to establish your business?
Third, do you have the time and expertise to negotiate with different brokers and landlords, while operating your business responsibilities?
Fourth, do you know how to use real estate to improve the competitive position of your business, considering the fact that Leasing costs are the second largest line item business expense and normally equate to some 25% to 40% of an operating business budget?
Fifth, do you know that the quoted rental rate of your building includes brokerage fees to be paid out by the Ownership? If you do not use a tenant representative, this fee will go entirely be redeemed by the building.
If the answers to any of these questions are no, then you are highly recommended to acquire the services of a tenant representative broker.
What the Hart Groups will look to achieve for your tenant representation assignment:
Analyze your space needs.
The tenant rep will assist you in calculating your actual need for space and determining your particular layout needs. This will prevent you from wasting time on property negotiations that are not right for your organization. Most importantly, it will prevent you from leasing too much space. The landlord has no incentive to help you economize on space and save money.
Working on Behalf of Tenants, Not Landlords
Investigate all available properties and determine which are the most appropriate for your needs. This involves more than scanning the available listing services. A professional tenant rep will identify a property that is not an obvious choice to meet your needs. This could result in lower rental rates and space that is better suited to your needs.
Create a bidding war among several landlords for your business.
A good tenant rep will leverage your requirement by launching a successful bidding war and prevent you from being a “captive audience” to one developer. The optimal number of bidders is usually three. Even if there is one property that you and your representative agree is the best, creating a three-way competition will optimize your negotiating position. The result will be concessions and incentives that exceed the norm in the marketplace.
Protect you during lease negotiations to ensure you meet your present and future needs.
The tenant representative knows all the ins and outs of real estate transactions and will help you avoid possible pitfalls. For example, a tenant representative would ensure you retain such options as subletting or termination in case you eventually shrink your organization, outgrow the space, or need to close the office. Options for an exit strategy are overlooked at your peril.
Serve as a buffer between you and the landlord.
A tenant rep can act as the “bad guy” when necessary during negotiations. At the same time you are securing major economic concessions, relying on a tenant rep to act as “bad guy” will keep your relationship with the landlord cordial.
Identify lease provisions that could cost you money during the lease term.
These often are hidden in the document and are easily overlooked. The tenant rep will reveal the hidden costs of leasing and give you an accurate assessment and analysis of what your Lease costs are actually going to entail.
Handle the paperwork and other details of the lease negotiation.
Having a tenant rep prepare all proposal requests, financial analysis, and letters of intent will help to resolve issues before the final lease is prepared. A professional tenant rep is familiar with real estate documents and how to compare proposals on and “apples to apples” basis. In addition, the tenant rep will help you avoid disasters caused by signing something by accident or out of ignorance.
Settle disputes that arise even after the lease is signed.
The tenant representative will serve as an experienced set of ears and eyes to verify the details of a transaction. The rep’s transaction files will provide the documentation necessary to clarify what was said and done during the negotiation.
Spotlight the savings
Here are a few examples of the savings a tenant representative can win for you:
Ensure you get the most value in any improvement allowances.
For example, without good representation, the tenant may sign on to an improvement allowance of $20 per square foot, not knowing that the actual market price for such work is $40. The tenant representative knows the market and would negotiate that any remaining funds be applied to lower the rent. (For a 100,000 sq. ft. building, that would mean a savings of $2 million!)
Safeguard you against signing onto any provisions that run against your economic interest.
For example, many leases pass through operating and tax expenses increases along to the tenant over a base year. Which base year? What is included in the base year expenses? Can the Landlord charge items in a different base year from that in which the expenses were incurred? These are all costly issues that will be addressed by the tenant representative.
Define lease terms to benefit you.
If your lease holds you responsible for ongoing maintenance, as many do, the tenant representative can assure that the definition of ongoing maintenance does not include the repair of pre-existing deficiencies, such as roof problems that may already have plagued the building. The tenant rep will know how to look at the move-in condition as a benchmark indicating the point at which your wear and tear commences.
Win concessions that anticipate your actual needs.
For example, a tenant representative can negotiate to receive a rent concession for “moving.” This means your lease begins, but you won’t pay rent during the time it takes to become operational move in. Because you will still operate out of your old space during moving and set-up time, this concession prevents you from paying double rent during the overlap period. The tenant rep is a specialist in selecting space and negotiating leases.