3 ways using Tenant Representation for your Commercial Lease Negotiations will save you money

October 16th, 2013

For the majority of businesses the second highest overhead cost after payroll is rent, making it one of the most important factors businesses need to consider. The famous cliche about  “location, location, location” being the three most important factors to a businesses’ success is very much grounded in reality.

Securing a lease is a highly specialized task best handled by experienced professionals yet, in most cases to their own detriment, many businesses still elect to undertake the job themselves, with CEOs all to often delegating this complex task to an unqualified subordinate.

 

Here are a few very good reasons to consult with a professional Tenant Rep before engaging in any real estate transaction or securing your next commercial lease

Even out the playing field

Commercial real estate negotiations are nearly always skewed in favor of landlords. Landlords have professional property management companies on their side that are experienced and knowledgeable about the “fine print.” On the tenant’s side, lease negotiations are undertaken by individuals with little or no real estate expertise and burdened with other responsibilities as well.

The unavoidable outcome is a poor deal negotiated from a position of ignorance and weakness. Choosing a professional tenant representative to negotiate for you ensures your interests are taken care of by someone at least as savvy and knowledgeable as your landlord.  At Koll, our job is to help you navigate the waters to save you time, money, lost productivity and aggravation.

Looking beyond price per square meter

Most commercial lease contracts are well over 50 pages long, offering one indicator as to the complexity of lease negotiations. The price per square meter is only one of countless minutia to be accounted for in calculating actual costs:

  • Parking spaces

  • Hours of air-conditioning

  • Signage

  • Fit-outs

  • Lease extension/expansion options

  • etc., etc., etc…

All of the above overheads must be accounted for in the deal, as all are real costs the business will be facing.  During the 20 years we at Koll have been representing tenants and their interests we’ve learned all the ins-and-outs of real estate transactions, so we can ensure you’re getting a deal that accounts for ALL the details.

Maintain good relations with your landlord

The tough negotiating necessary to ensure you’re getting the best deal possible can cause friction that may impact tenant-landlord relations with potentially unpleasant consequences for your business. Outsourcing the negotiation process to a professional tenant representative helps you avoid confronting your landlord directly. At Koll, we often serve as the buffer, or “bad guy” when necessary, ensuring our clients’ standing with the landlord is undamaged.