So, you are looking to find or relocate your office or warehouse space, but you don’t know whether or not you’re ready to commit to hiring a professional real estate broker to represent you.

This guide will educate you on everything you need to know before making the decision and hiring the best broker for your company — from understanding what a tenant representation broker does and how much they cost, to the benefits of using one and what questions to ask a prospective broker before hiring their firm.


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Jon Wheless | Commercial Real Estate Tenant Representation Services Broker in Austin, Texas | Principal AQUILA Commercial About the Author

Jon Wheless

Jon Wheless is an emerging leader in the Austin commercial real estate community. Jon has an incredible work ethic, and he works tirelessly to craft successful real estate solutions for his clients.
Chapter 1

Who Should Hire a Tenant Representation Broker?

Before we get started, it’s important to understand whether or not hiring a tenant representation broker is right for you and your company.

You might be interested in hiring a broker if you are a business or retailer:

  • That is looking for new office, retail or industrial space
  • With an upcoming lease expiration
  • Whose current office no longer meets your needs (maybe is too big or too small)
  • That is feeling overwhelmed by the process of finding office space or (re)negotiating your lease

Nearly every business can benefit from using the services of a tenant representation broker.

Companies that use tenant rep brokers can be:

  • Small or large
  • Local, regional, national or international
  • Retailers, restaurants, warehouses, manufacturers, distributors or office users
  • Private, public, government or non-profit organizations
  • From any industry – from technology to professional services, healthcare to logistics
Bottom line: if you are a business who needs to rent, lease or buy commercial real estate, a tenant representation broker can help.
Chapter 2

What Exactly Is a Tenant Representation Broker and What Do They Do?

Tenant representation brokers represent businesses in commercial real estate transactions. 

They are also sometimes called “tenant advisory” or “corporate services” representatives, but you will most often hear them referred to as “tenant reps.” 

A tenant rep is there to assist companies and organizations throughout the entire leasing process, from the initial needs assessment and site selection to occupancy, lease expiration and beyond.

The job of a tenant representative is to take the stress of the real estate process off your plate.”

Kristi Svec Simmons
What is a Tenant Rep Broker and What Do they Do?

Think of a tenant rep as your own personal assistant whose goal is to help your company find the best office space possible with the least impact on your bottom line. 

Finding the right real estate solution truly is a full-time job, and a tenant rep will run the process for you, presenting you with the best options to fit your company, while you focus on what matters most to you – your business.

What Does a Tenant Representation Broker Do?

A tenant representation broker helps facilitate the leasing transaction between a tenant and a landlord. 

Rather than going through the process alone, a company can hire a broker to represent them throughout the entire leasing process. 

Here are a few key things a tenant representation broker can help you with:

  • Deciding whether to relocate versus renew your current lease
  • Finding the right space for your needs
  • Negotiating your lease
  • Answering questions during your lease
  • Helping sublease all or part of your space
  • Selling or purchasing space

It’s important to also know what a tenant rep does not do. A tenant representation broker does not: 

  • Make decisions on behalf of your company 
  • Replace your lawyer when it comes to reviewing your lease
  • Work for building owners

There are several other things besides finding and leasing space a tenant rep broker can help you with. Some of these include: 

Chapter 3

Why You Should Hire a Tenant Rep Broker Versus Doing It Yourself?

When you use a tenant representation broker you are basically outsourcing your real estate. But you still might be thinking “I could just do this myself.”

There are numerous other benefits of hiring a tenant representation broker besides just having someone take it off your plate. The three most common reasons our clients say they hired a tenant rep broker are:

1. They Will Help You Understand Your Needs (Now and in the Future)

Often, companies are looking for new space when their current space no longer fits their needs.

It is important to begin the site selection process with a needs assessment. Does your vision match up with what you need? A tenant rep broker will ask you the necessary questions and run the preliminary analysis to help you determine exactly what you need in your new office space, factoring in, of course, your desired budget.

It’s not only about finding space that works for your company now, but planning for a space that will serve your company for years to come.

A tenant rep broker can help you plan for the future — they will take into account how much space you need now and how to manage your projected growth.

2. They Will Give you Access to More Options

If you are trying to find space on your own, it can be difficult to get the full picture of what’s available. A tenant rep broker will be able to identify more options that you could on your own – and with much less time and effort.

A tenant rep broker has numerous resources to find the most inclusive list of real estate options on the market, such as:

  • Complete Listings: Commercial real estate brokers have access to the most complete listing databases like Costar, essentially the MLS of commercial real estate.
  • Industry Relationships: Tenant reps have professional relationships with both leasing brokers and landlords, which allows them to easily get updated information on what’s available now.
  • Off-Market Options: Through their industry connections, tenant rep brokers may also have information on spaces that are not on the market yet, as well as companies that are attempting to sublease some or all of their space.

They will also take the time to cull through the list and present to you the options that best suit your needs.

3. They Will Help Negotiate Your Deal Terms

Going into the lease negotiation process alone can be overwhelming and incredibly challenging. This is where hiring a tenant rep broker can save you a lot of headache and money.

A tenant rep adds value to the negotiation process by knowing what economic and non-economic factors are common in the market, as well as walking you through the negotiation process and explaining things to you along the way.

By hiring a tenant rep, you can help your company get the best lease terms possible without the stress of worrying about whether you are doing everything correctly.

At the end of the day, real estate is a complicated industry. There are so many industry-specific terms, legal details and market intricacies that it is almost impossible for someone not actively involved with real estate to know everything.
Chapter 4

What If You're Not Looking for New Space? Why You Should Use a Broker for a Renewal

Would you write your will without the help of a lawyer? Invest millions of dollars without the help of a financial advisor? That is essentially what you’re doing when you choose to not use a tenant representation broker on your real estate transaction.

But what if I already have a renewal options in my lease?

Even if you have a renewal option in your existing lease, it is wise to go through the entire process to secure the most favorable economics.

A lease renewal very rarely gets executed exactly per the language in a tenant’s existing lease. Including a renewal option in a lease is always good to have in place as a safety net, but, in practice, almost all renewals are negotiated similar to the way a new deal would be.

Oftentimes, landlords will not give concessions if they are certain the tenant will stay. So, in order to get the best transaction, we have found that tenants should treat the renewal process the same way as if they were planning to move. This means actually going through the site selection process, even if you don’t think you intend to relocate.

Kristi Svec Simmons, SIOR
3 Reasons to Use a Tenant Representation Broker for Your Lease Renewal

Whether you are looking for new office space, or planning to renew at your current space, you should follow the same process on the front end. 

This means actually going through the site selection process, even if you don’t think you intend to relocate.  

Going through the site selection process and considering other viable options can give you the best chance to gain concessions since you have “one foot out the door.”

Your tenant representation broker will attempt to find an attractive alternative so that you become indifferent to staying or leaving, thus creating leverage for negotiations.

Your landlord may be more likely to allot you concessions in an effort to keep you, if they think there is a likelihood you will vacate at the end of your lease.

Chapter 5

When Should You Begin Looking for a Tenant Rep Broker?

You should begin the process of looking for a tenant rep broker early enough that you have enough time to properly vet multiple brokers and firms and make a selection in time to go through a comprehensive site selection and negotiation process.

The simple answer is: as soon as possible.

You should plan ahead so you have enough time to:

  • Identify multiple options
  • Create a competitive environment by leveraging landlords against one another
  • Negotiate the various deal points and legalese within the lease document
  • Have plenty of time to complete construction or build-out of the space and move in

If you don’t allot enough time for each of these steps, you could lose leverage and be forced to make decisions without fully vetting each option, ultimately resulting in financial loss or business interruption.

Typical renewal/search timelines based on tenant square footage are:

Company Size Time Frame to Begin Process
> 25,000 SF 18 – 24 months prior to lease expiration
10,000 – 25,000 SF 12 months prior to lease expiration
<10,000 SF 6 – 12 months prior to lease expiration

Sample Leasing Timeline Template

How long is your site selection process going to take? From discovery to move in, this timeline template breaks out each step of the process in order for you to properly plan and schedule. While every lease is different, this timeline template allows you to customize each piece of the puzzle to reflect your project's requirements.

Download Your Timeline Template Now

Chapter 6

How Much Does It Cost to Hire a Tenant Representation Broker?

Good news! Typically, you (as the tenant) do not have to pay the tenant rep broker anything out of your own pocket.

(There are exceptions to this, but they are rare.)

Tenant representation brokers are paid a fee, often called a commission, by the landlord upon the completion of a transaction. This commission varies based on the type of space you’re leasing and the type of lease you’re working on (i.e. – new, renewal or expansion). 

For a full explanation of how a tenant rep broker’s commission is calculated, read this article or watch the video below.

Chapter 7

How to Hire the Right Tenant Representation Broker

Now that you understand why you need one and how much it will cost, how do you go about hiring the best tenant rep broker for your company? 

In order to make the broker selection process easier, we’ve outlined the key questions you must ask a tenant rep broker during the interview process.

1. Does the broker work for a reputable firm?

Making sure your tenant representation broker works for a reputable firm is important. Reputation and resources are key components to hiring a reputable broker.

Reputation

Client testimonials and references can be key to understanding if a firm just presents well, or if they truly have the sophistication and ethical standards to get you the best results possible.

Resources

Additionally, you should ensure your broker has the resources needed to handle your project, including: 

  • Listing Sites 
  • Mapping Software
  • Market Research Department

In most markets, you will run into both national powerhouses and local experts. To help navigate which is best for you, we’ve put together this article highlighting the pros and cons of each type of firm.

2. Has my broker made reputable and trustworthy deals in the past?

It is equally, if not more important, to make sure that the specific broker within the firm you are considering has pleased clients in the past and has a sufficient amount of experience.

Your broker’s reputation within the industry can materially affect how landlords and listing brokers treat your prospective tenancy. Tenants whose broker’s had positive interactions with other industry professionals can reap the benefits of accumulated goodwill, while tenant’s whose brokers had less than pleasant experiences with other industry professionals may have to deal with unwanted and undeserved consequences.

Ultimately, tenant rep brokers want to have a strong reputation and do well for their clients so that they can win more business. Being honest, trustworthy and a good negotiator are all crucial to maintaining a positive reputation in the industry.

Matt Wilhite
5 Reasons to Hire a Tenant Rep Broker From a Full Service Firm

Your broker should be able to provide you with a number of testimonials and references from previous satisfied clients, and those clients should be able to confirm their satisfaction from working with the broker.

3. How much experience does my broker have?

This does not necessarily mean how long a broker has been in the real estate industry. Instead, you should ask questions about how well they know the local market and the kind of property you’re looking for.

4. Does my broker specialize in my industry?

When looking for a tenant rep broker, you want to make sure your broker not only specializes in tenant representation, but understands your property type and industry.

Because of the variety of commercial lease structures and elements of commercial leases, it is important to find a broker with experience dealing with your specific needs. In addition, the office market, industrial market and retail market all have their own industry trends and networks, which a property-type specialist will understand.

Additionally, you’ll want to make sure your broker understands the specific needs of your industry. From law firms to tech start-ups, call centers to distribution centers, each type of business has it’s own unique requirements for space. Be it high parking ratios and the ability for high-density office space or the need for substantial tenant improvement requirements for luxurious common spaces, a broker who has worked with similar companies or firms will likely already be aware of these needs, and may even make a few recommendations based on what they’ve learned from these past transactions.

5. Does my brokerage firm offer additional services and assistance throughout the process?

Finding the right space for your company is only the start of your commercial real estate journey. Your broker should be able to assist you with finding the right consultants and contractors for personalizing your workplace strategy, IT infrastructure, furniture selection and often times can offer you important business insight from past deals. Furthermore, in the future you can reach out to this broker should you need to expand, renew or relocate.

By working with an exclusive tenant representation broker, that broker can then deploy additional company resources and bring in a dedicated team to assist with your transaction, including financial analysts and advisors, project management, architectural teams that will help the tenant come to realize their total future costs.

Jon Wheless
5 Reasons to Hire an Exclusive Tenant Representation Broker (Not Multiple)

In addition to the services your broker can provide, your broker should be able to provide you with recommendations for a project manager (a must-have if your new space requires renovations of any sort). Most full-service commercial real estate firms have project management teams that can (and should) be brought in during the site selection process.

We explain the benefits to be had by engaging a full service firm in our article 5 Reasons to Hire a Tenant Rep Broker From a Full Service Firm.


25 Questions to Ask Before Hiring a Tenant Rep Broker

25 Questions to Ask Before Hiring a Tenant Rep Broker

We’ve compiled a list of the 25 must-ask questions you should before hiring a tenant representation broker. These questions will ensure that you find a qualified, capable broker who is also the right fit for you and your company.

Download Now

Do you work for a government, education or non-profit entity or organization?

If so, you may be required to undergo a formal bid process, known as a Request for Proposals (“RFP”) or Request for Qualification (“RFQ”), in order to select an approved vendor or vendors for your commercial real estate needs. 

Read our article How to Write a Request for Proposal (RFP) to Hire a Real Estate Broker to learn more about this process. 



Professional Services Agreement for hiring a tenant rep broker

Sample Commercial Real Estate Brokerage Services Agreement Template

Once you select your tenant representation broker, you will need to sign a brokerage services agreement. Are you curious what a brokerage services agreement should look like? Or not sure where to start when drafting your own? This free, editable Word-based Services Agreement Template will give you an overview of what your agreement should look like and a good starting point for writing or amending your own.

Download Now

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