by Mike Kushner, CCIM
Now more than ever, if you’re looking to lease real estate, you need commercial tenant representation on your side. The services they provide, which include negotiations, market expertise, coordination, and strategic advice, have not changed. However, the commercial real estate landscape has changed in the post-COVID economy and the complex financing and political challenges that have accompanied our economic climate. Here are six reasons why working with a commercial real estate professional who is exclusively representing you as a tenant is more important now than ever before.
1. Space Usage Has Changed
During COVID, when basically all non-essential businesses were forced to temporarily close or work remotely, the way people use commercial spaces changed drastically. Even after we’ve returned to business and moved past those times, the commercial landscape has remained changed and likely will continue to follow that path as we move forward. Some businesses decided to remain virtual, and thus have completely removed themselves from their commercial spaces. Others needed more space or a reconfiguration of space to accommodate growth and expansions. Some businesses have adopted a hybrid model, some have reimagined their communal space uses, and some have even completely pivoted their business model.
Having a tenant rep on your side to help navigate the changes through your business’ seasons is a huge benefit. Tenant reps can help with lease negotiations if you need to break or change the terms of your lease. They can also help you secure a different space that meets your needs better, if that’s the optimal solution for your business. Doing this all on your own is a big undertaking, and you don’t know what you don’t know. That’s where a tenant rep can step in to take this off your plate and allow you to focus on running your business.
2. The Market Has Changed
COVID turned everything on its head, which includes the commercial real estate market. We are seeing dramatic changes in availability, financing, lease rates, and consumer habits. It’s a new world out there, and you need to understand the changes and how they might affect your business. It’s a tenant rep’s job to monitor the market and help their clients adjust accordingly. With someone to guide you, the unknowns can start to make a little more sense.
3. Understanding a New Market is Challenging
If your business needs to find a new space, particularly in a different city, this is where a tenant rep can really be invaluable. With online shopping and virtual meetings having experienced a huge boom, your client base can be all over. If it’s time to expand to a new market, it can be virtually impossible to learn the location without living there or having visited it. It’s like shopping with a blindfold on. Just as your clients trust you to assist them even when you’re not in-person together, you can trust your tenant rep to assist you with your commercial real estate needs when you can’t be there physically. They are a wealth of knowledge and expertise about the local market. Tenant reps can help you identify the right options for your business, allow you to virtually tour the space, and then work on your behalf to negotiate a favorable lease.
4. Not Everything is Represented Fully Online
Another important consideration is that not everything you see online is true, or the complete picture. Many commercial properties aren’t listed online, or the listing may not tell the full story of the property. With so many places to look at listings online, how can you be sure that you didn’t overlook something? A tenant rep who knows the market knows what spaces are available and can lead you to listings that may not be online or publicly available. All of this works to your advantage, allowing you to see your blind spots and ensure you haven’t missed the perfect opportunity.
5. Negotiation is at an All-Time High
Thanks to the market changes, many negotiations that would not have been possible before are now taking place between tenants and landlords. Yes, it’s a seller’s market in housing, but in commercial real estate – the considerable vacancy rates nationwide make it a tenant’s dream! There are many items in your lease that can be negotiated, and landlords are offering terms that they would not have even considered prior to 2020. You can absolutely use this to your advantage. A tenant rep who is skilled in negotiating can step in on your behalf to arrive at a reasonable and favorable outcome for your lease agreement.
6. You Need to Protect Yourself
If there’s one thing we learned thanks to the pandemic, it’s that your situation could change at the drop of a hat, with no notice or prior warning. A tenant representative will make sure that you’re protected in your lease agreement for any future changes that may take place. For example, would it make sense for you to have a long-term contract to protect against market lease rate changes, or would it make more sense for you to have a short-term contract to allow greater flexibility if your needs should change? What happens if you need to break your lease? What options are available if you need more or different space in the same building? All of these unknowns should be considered before you put your signature on anything. A tenant representative makes sure that everything is covered and you’re getting the best possible outcome for your business.
Are you considering moving into a new space, or is your lease due for renewal? Don’t negotiate alone. Contact our tenant representation experts today to find your perfect space and ensure you’re receiving the best possible terms for your lease.
This article was originally published on the Omni Realty Group website by Mike Kushner, CCIM. Omni was an exclusive buyer agent/tenant rep commercial real estate firm owned by Mr. Kushner prior to his joining the Capstone Commercial team. It has been adapted and reposted with permission. See the original article here.
