When a potential client is about to make a big decision such as deciding on their next CRE space to lease, it’s crucial to remind them how valuable tenant representation is throughout the entire process. If not, they could end up making a costly mistake for their company. Here are just a few items to keep in mind that will ultimately help you gain their business, and also their trust.
1. You’re on the same team
Clients with little CRE knowledge often confuse tenant reps and landlord reps so it’s very important to differentiate these two immediately. As a tenant rep, remind your client that you work for them and only them. It’s your job to guarantee an outcome that is aligned with your client’s specific needs; whether it’s the location, need to attract/retain talent or corporate image and branding, to name a few, while negotiating the best deal terms possible by leveraging the market.
2. Inside CRE knowledge and technology
Educate your clients on how most CRE spaces are often filled before they are even advertised. Thankfully as a tenant rep you have direct access into insider market knowledge from the relationships you have cultivated over the years, as well as access to research tools designed specifically for CRE professionals that allow you to provide your clients with data they would have otherwise never known about!
3. Professional Negotiating
Negotiations can be long and complicated so having a professional on their side will greatly benefit them. Since it’s common for clients to only consider price and length of lease when they first think of negotiating, it’s important to educate them on all the constant moving parts. This way everything from their rental rate, rate type, operating expenses, annual escalations, subletting contingencies and termination or renewal options are a small list of negotiable terms the client may have never thought about before, but can now trust you with. As the tenant rep, you also have the advantage of using CRE tools such as REscour, a CRE data management platform, which allows you to negotiate while being able to see specific terms of past deals that the landlord has done.
4. Time saver
Clients often believe finding a space will be a simple process that can be tossed on top of their current duties, which isn’t the case in the slightest. The entire process starting from initial client contact to when the client actually signs a commencement letter consists of dozens of calls, emails, meetings and property tours.
“Depending on the client and deal size, as a tenant rep I would advise to start the process 5 months to 3 years before a lease expiration or potential relocation. With ample time and our expertise, our clients should never have to make a hasty, uninformed leasing decision. My job is to streamline the decision-making process by using CRE tools, market data and financial analytics to ensure an office lease is aligned with the client’s overall mission and mitigate any unnecessary real estate exposure.” -Dany Koe, Colliers International
5. It’s already paid for
If all else fails, remind the client that your skills come at no extra cost! In most cases there is already a fee built into the asking price that will be paid whether or not the client has representation! A landlord rep will typically negotiate a standard market fee with the landlord before listing a property. In Georgia, the standard market fee is 1 to 1.5 months’ rent as the “procurement fee” plus 4%-6% of the remaining aggregate gross lease amount which is split between the tenant representation (leasing agent) and the listing agent. This means not only will they be benefiting from all your knowledge and services but it is probably already built into their total cost without them realizing it.
At the end of the day, CRE is a complex industry so it’s necessary to educate clients on why they should consider hiring you as their tenant rep. Everything from minor market intricacies, to important legal details, it’s almost impossible for someone not actively involved in the industry to have a successful outcome on their own. Be the trusted expert.