Are you a property owner looking to hire the right commercial leasing team for your property?

This comprehensive guide provides essential insights for businesses seeking to hire a leasing team. It covers key aspects such as the role and fees for landlord brokers, the advantages of their services, and crucial inquiries to make when evaluating prospective brokers for your organization.

Seth Stuart | Commercial Real Estate Project Leasing in Austin, TX | AQUILA Commercial About the Author

Seth Stuart

Seth is a team leader whose focus constantly builds toward driving the project leasing team forward.
Chapter 1

Who Should Hire a Commercial Leasing Team?

Prior to proceeding, it is crucial to assess whether engaging a project leasing broker aligns with your objectives. The services of a commercial leasing team can be beneficial to:

  • Owners of a commercial property requiring leasing to third-party tenants.
  • Owners who own and occupy a commercial property with available space for third-party lease.
  • Owners intending to prelease a new development.

Furthermore, it is advisable to consider involving a local leasing team when contemplating property acquisition or development in an unfamiliar market.

Bottom Line: Anyone who owns commercial property that they lease to tenants can benefit from hiring a commercial leasing team.
Chapter 2

What Is a Commercial Leasing Broker and What Do They Do?

What Is a Commercial Leasing Broker?

A commercial leasing broker, also known as a project leasing broker, landlord broker, or agency broker, serves as the representative for the owner or landlord in commercial property transactions.

Their role entails marketing the property for lease and skillfully negotiating terms with tenants to secure advantageous agreements.

What Does a Project Leasing Broker Do?

The responsibilities of a project leasing broker include: 

  • Marketing the building
  • Identifying the appropriate asking rental rates
  • Negotiating lease terms with a tenant
  • Facilitating property tours
  • Maintaining relationships with tenants

A landlord broker provides valuable insights into the market, competitive dynamics, and tenant demand. They offer expert guidance on optimizing your property’s positioning for success and spearhead effective marketing strategies and lease negotiation endeavors.

Marketing Your Property

andlord broker facilitates the strategic positioning of your property to enhance its appeal to potential tenants. They employ a blend of property marketing and comprehensive market research.

Read Next: Do I Need a Custom Brand Identity for My Commercial Property?

Leasing & Negotiations

During the leasing process’s initial stage, a tenant representative broker will submit a Request for Proposal (RFP) on behalf of their client. The RFP seeks input from you, as the landlord, regarding proposed lease terms.

It is important to note that the initial proposal does not legally bind either party. It serves as a platform to discuss potential lease details, including timing, rental rate, tenant improvement amount, and more. Your broker’s objective is to negotiate favorable terms on your behalf while minimizing associated risks.

Please be aware that while a skilled broker can assist in negotiating these terms, their guidance should not substitute the advice of a legal professional. We strongly recommend engaging a real estate attorney to provide legal counsel regarding any contractual documents.

Underwriting Acquisitions

If you’re a commercial real estate investor assessing potential acquisitions, engaging a landlord broker can prove invaluable. They possess the expertise to analyze both on-market and off-market properties.

An adept landlord broker possesses access to proprietary data, including historical and current lease rates. This enables a comprehensive evaluation of the property, empowering you to make well-informed decisions.

Given the dynamic nature of commercial real estate markets, enlisting the services of an experienced broker for underwriting guarantees an accurate assessment of prevailing rates and future trends.


Purchasing a New Property

Prior to property acquisition, we strongly advise enlisting the services of a local project leasing broker. Their expertise ensures your commercial real estate investment yields optimal returns and maximizes its potential value.

Read More: A Complete Guide to Common Commercial Real Estate Underwriting Terms & Definitions

Qualifying Tenants

Landlord brokers play a crucial role in tenant qualification, scrutinizing their credit and financial background.

By ensuring the credibility and financial stability of potential tenants, you can mitigate risks significantly. Landlord brokers evaluate tenants’ previous financial records, creditworthiness, and leasing track record. This assessment allows them to provide recommendations on the tenant’s reputation and the likelihood of adhering to lease agreements.

Development Strategy

If you have development plans, leveraging a landlord broker’s expertise can effectively position your property in the market to attract desirable tenants or industries. This strategic approach often leads to higher rental rates.

Determining whether to pursue speculative development or pre-leasing carries significant implications for rental rates, vacancy rates, tenant profiles, and more. A skilled broker can devise a tailored strategy that optimally aligns with your development objectives.

Read the full article here: What Does a Project Leasing Broker Do?

Chapter 3

Why Should You Hire a Commercial Leasing Team?

Engaging a commercial leasing team offers the advantage of securing more favorable rates and terms compared to in-house handling. Additionally, they excel at addressing any challenges that may arise during the leasing process.

Benefits of Hiring a Project Leasing Broker

Project Leasing Brokers Have Connections

Experienced project leasing brokers possess established networks of relationships with local brokers, a valuable asset in identifying potential tenants and assessing the suitability of your space for their requirements.

When faced with challenges in tenant identification, engaging a landlord broker becomes a compelling choice. Leasing teams maintain regular and active communication with fellow brokers, granting them insights into ongoing projects and collaboration opportunities. They can recommend your property to tenant representative brokers actively seeking suitable spaces for their clients. Furthermore, they possess a deep understanding of the motivations, communication preferences, and dynamics within various tenant and broker profiles. Their extensive connections and expertise enable effective promotion of your property.

Project Leasing Brokers Have Access to Listing Sites

Effectively promoting available commercial space entails listing it on prominent commercial real estate websites, maximizing visibility to attract potential tenants.

However, subscribing to listing sites like CoStar and LoopNet can be prohibitively expensive, making it challenging for landlords to list spaces independently.

Fortunately, landlord brokers typically have access to these platforms. By leveraging their access, they can list your space on your behalf. This ensures maximum exposure and increases the likelihood of securing a lease promptly.

Project Leasing Brokers Are Experts at Marketing Space

Generating sufficient interest in a property requires more than simply listing it on a website. However, many landlords lack the time and expertise to handle tasks like designing flyers, creating floor plans, developing websites, and executing email campaigns.

This is where a landlord broker proves invaluable.

A landlord broker develops a strategic marketing plan tailored to your building’s market position, allowing you to effectively compete with comparable properties. This plan identifies potential tenants that align well with your property, ensuring a targeted marketing approach.

When you’re working with a professional, reputable commercial real estate brokerage, a standard marketing package should be included in the listing agreement free of charge.”

Kathleen Brennan
What Marketing Materials Should a Commercial Leasing Firm Provide?

In addition to this marketing plan, a commercial leasing firm should have an in-house marketing team. This team will put together essential marketing materials to help gain more exposure.

Your brokerage firm should provide:

  • Property flyer or brochure highlighting availability, location, property features, and surrounding amenities
  • Floorplans
  • Email campaign
  • Listing page on the brokerage firm’s website with availabilities, floor plans, and photos
  • Leasing signs or banners
  • Maintenance of listing on third-party leasing sites such as CoStar

There are also several advanced marketing techniques that your broker may recommend for your property. These can include a property website, branding, advertising, events, video, 360 video tours, and more.

Read More: How Much Does It Cost to Market a Commercial Property?

Project Leasing Brokers Brokers Have Market Data at the Ready

Your landlord broker plays a crucial role in ensuring your property maintains a competitive position by analyzing dynamic market conditions.

To accomplish this, they meticulously examine comparable leases in competing buildings to determine your property’s positioning. They also consider forthcoming developments and upcoming availability in the area. Furthermore, potential zoning changes are taken into account, with a thorough analysis of their potential impact on your property in the future.

Armed with this valuable data, your landlord broker leverages it during negotiations to secure the most advantageous terms. Thus, it is imperative to possess reliable, high-quality information and data for effective decision-making.

Project Leasing Brokers Are Experts at Creating Leverage

The data access of a project leasing broker provides them with a valuable leverage advantage. They possess insights into the performance of other buildings in the market and are knowledgeable about prevailing lease rates. This information significantly aids them during negotiations.

While it is possible to independently gather similar leverage, having a project leasing broker on your team grants you a distinct advantage.

Read Next: Reasons Your Commercial Property Isn’t Leasing

Project Leasing Brokers Take the Stress Off Your Shoulders

The challenges of leasing a property independently often stem from a lack of dedicated time. Unless property management and leasing are your sole focus, other commitments tend to compete for your attention. Consequently, this can hinder your ability to handle tenant inquiries, conduct property tours, and more.

Engaging a project leasing broker removes these responsibilities from your plate, allowing you to allocate time to other endeavors. By doing so, you can alleviate concerns about the leasing process becoming excessively time-consuming.

Reasons to Consider Hiring a New Leasing Team

Some situations may call for you to consider hiring a new leasing team. Whether you have purchased a new property or are evaluating your current leasing team, there are a few signs you should look out for.

1. Your current team isn’t performing well

Your team could be underperforming in several areas including:

  • Marketing: your leasing team should provide the essential marketing materials that we previously mentioned.
  • Market research: your leasing team should have the most up-to-date data about the market.
  • Market knowledge: in addition to data, your team should also have general knowledge about the market and connections in the market.
  • Rapport with tenants: the ability to effectively communicate and establish a level of trust with tenants is key. 

In the event that your leasing team is underperforming in any aspect, it is advisable to address the issue with them and explore opportunities for improvement. If no significant changes occur, it may be necessary to consider engaging a new leasing team.

2. Your property needs new ideas and energy

To avoid fatigue from repetitive marketing efforts, it is essential to revitalize your property leasing initiatives. Engaging a new leasing team can infuse fresh energy, introducing innovative marketing ideas and leasing strategies that make a significant impact on your property’s market presence.

3. You have another team in mind that you want to bring in

When considering whether to retain your existing leasing team or hire a new one after acquiring a property, it is crucial to evaluate your established relationship and level of trust. In some instances, retaining your trusted team can facilitate a seamless transition, leveraging their familiarity with your needs and expectations to expedite progress and generate cost savings. However, it is essential to assess both the capabilities of the current team and the capacity of your trusted team before making a decision to switch.

If the existing team has a record of success at a property, it may make sense to keep them engaged on the property.

Read the full article here: Problems A Landlord Broker Can Help You Solve

Chapter 4

How Much Does It Cost to Hire a Commercial Leasing Team?

Leasing brokers typically do not require upfront fees when hired. Upon selecting a broker or firm, the negotiation of brokerage fees takes place. These fees, commonly referred to as commissions, are paid to the broker upon successful lease transactions. The specifics of these fees will be outlined in the listing agreement, which serves as a contractual agreement between you and your leasing broker.

In Austin, the standard commission fee is 6% of the total gross rent to be collected across the life of the lease. This fee is split between the tenant rep broker (4%) and the landlord broker (2%). This is the standard, but commissions can vary based on property type and deal type. If the transaction is a direct deal (meaning the tenant does not use a tenant representation broker), the listing broker will usually receive a 4% fee and you (the property owner) will save 2%.

Typical Fee on an Office Property = 6% x (Average Annual Gross Rent* x Lease Term
*Annual Gross Rent = (Base Rent/SF + Operating Expenses/SF) x Size

Typically, the landlord pays all leasing fees and commissions. There are exceptions to this, but these are very rare.

To learn more about how commissions are structured in Austin, Texas, read our article Cost to Hire a Commercial Project Leasing Broker.

Chapter 5

How to Hire the Right Leasing Team

Selecting the ideal leasing team for your project can be a challenging task. Engaging the right team from the start will facilitate a smooth leasing process while saving valuable time and resources.

To assist you in selecting the best leasing team, we have curated a list of five essential questions to ask potential teams. These questions will enable you to make a more effective and efficient decision in choosing your ideal team.

1. Does this leasing firm have a good reputation?

When seeking a leasing firm, prioritizing a strong reputation is essential.

Ensure that your leasing broker is supported by a reputable and well-regarded team with established relationships in the Austin market. Having an experienced broker handling your property alleviates the associated burdens.

Numerous reputable companies operate within the Austin market. It is worthwhile to invest time in evaluating each company, selecting the one that instills the greatest sense of confidence and comfort.

Read Now: The Best Commercial Project Leasing Firms in Austin, Texas

Some ways you can determine the reputation of a specific company include:

  • Reviews by previous clients (either online or through referrals)
  • Rankings in your local Business Journal
  • Reviews by tenant rep brokers in the market

2. How well does this leasing team know the market?

Market knowledge is a crucial asset for your leasing team.

The success of attracting suitable tenants and securing favorable lease terms hinges on their comprehensive understanding of the specific market dynamics and nuances. Therefore, it is vital to engage a leasing team with extensive experience in the market.

Some questions an experienced leasing firm should be able to answer include:

  • What is the average rental rate and vacancy rate in this market?
  • Is it standard for owners to charge for parking in this market? If so, what are typical parking rates for reserved and non-reserved spaces?
  • How have other properties performed in this area?
  • Can you provide relevant case studies?
  • How is activity in this market, and are there any significant blocks of space available or coming available that might compete with my property?

3. Do you have any conflicts of interest?

Ensuring your broker avoids conflicts of interest is paramount.

A potential conflict arises when the broker represents a competing property, as both properties may vie for the same tenants. However, conflicts only arise when there are competing availabilities or comparable rent rolls in the near future.

For instance, if your building currently has a 20% vacancy while the competitive property is fully leased for the next five years, the conflict is unlikely. In smaller markets, larger brokerage firms often lease competing properties.

To ensure transparency, consider asking the following questions:

  • What properties do you currently represent?
  • What current and upcoming vacancy do you have at these properties?
  • How does your firm handle conflicts?

4. Does this firm specialize in my property type?

Specialized expertise is crucial for successful leasing, as different property types demand specific knowledge and skills.

Leasing an office property, for example, requires a distinct expertise compared to leasing a retail or industrial property.

Fortunately, many firms have a diverse mix of specialists covering office, retail, and industrial properties. Each broker usually specializes in a particular property type. It is essential to ensure that your broker possesses relevant experience and a track record in leasing properties similar to yours.

5. Does this firm offer services outside of leasing?

When considering a leasing agent you will also want to consider what other types of services you may need.

At AQUILA we have managed and leased dozens of properties… and have seen firsthand the benefits of having leasing and management handled by the same firm. Our leasing teams have also worked with other property management firms and with landlords who have their own in-house property management. While we’ve seen successful results in all these scenarios, we have heard from many owners that using integrated services that it makes their lives easier.”

Graham Moore
4 Benefits of Using the Same Real Estate Company for Leasing and Property Management

Full-service commercial real estate companies offer a wide range of services to their clients. Some of the services a full-service commercial real estate company may offer but are not limited to include:

  • Project Leasing
  • Property Management: Having a leasing and management team from the same company allows for efficiency and open communication.
  • Project Management: An in-house project management team can help lead capital improvements, TI build-outs, spec suites, and more.
  • Tenant Representation: Working with a firm that has a tenant representation team can help your brokers know what tenants are in the market and what they are looking for.
  • Commercial Real Estate Investment Services: Your project leasing broker should also be able to help you evaluate the market and any potential acquisitions or dispositions. They can also assist in underwriting and transacting the sale. Some firms may also have an in-house commercial real estate investment sales specialist.
  • Market Research Team: A firm’s market research team can provide you with current market rates and trends. They can also provide an overview of what’s going on in each submarket. This includes current availabilities and upcoming developments.
  • Marketing: Your leasing team should be able to provide standard marketing for your commercial property. These items should include a property flyer, leasing signs, a listing page on the company website, addition and maintenance of the property on CoStar, and an email marketing campaign.

Read the full article here: Interviewing Leasing Firms for Your Commercial Property? Questions You Must Ask

25 Questions to Ask Before Hiring a Project Leasing Broker

Finding the right commercial leasing firm for your property can be a challenge, especially in a competitive market like Austin. Hiring a good company from the beginning can save time, money and a lot of headache down the road. To help make this selection process easier, we have compiled 25 must-ask questions for you to reference during the interview process.

Download Now

Ready to Talk to an AQUILA Project Leasing Broker About Your Property in Austin, Texas?

Contact AQUILA

Have a question? Ready to chat about your commercial real estate needs? Reach out below.