Do you really need a broker next time you renew a lease? Perhaps you consider yourself a good negotiator. Maybe you’re completely happy where you are, and have a good relationship with your landlord. So what’s in it for you to use a broker?
In a word, plenty. The “golden rule” of real estate negotiation is: Leverage = Time + Options. Unless you have full time to commit to pursuing the optimum deal, and you are fully aware of all the opportunities both in your market and within your current landlord relationship, you’re likely going to leave savings and favorable conditions on the table. Here are the Top 7 reasons to use not just a broker, but an experienced broker, trained and specializing in tenant representation.
Brokers are in business because they save clients time, money and risk, pure and simple. For their service, they receive a fee, which is paid by the landlord—not the tenant. The landlord’s budget includes brokerage fees within their rent structure—which, when you think about it, increases the value of their buildings. If a tenant represents themselves, the landlord typically allocates the fee budgeted for the tenant broker to the owner’s agent, or asset or property manager. It costs you nothing extra to use a broker. You are just accessing “market fees” that are going to be paid as part of your transaction.
To discourage a tenant from using a broker, a landlord will sometimes offer to pass the amount of the fee to the tenant if they represent themselves. In reality, even if you do receive the brokerage fee “on paper,” you will assuredly more than pay for it in other undisclosed ways, including a lesser overall deal due to weakened negotiating capability. According to our research, a good broker will save an average of seven times the cost of their fee. In short: even if the landlord offers you the brokerage fee, you’re still money ahead by forgoing it for a trusted expert advisor who can save you even more.
Chances are that, if at all, you study the property market in your locale mostly at lease renewal time. Brokers are immersed in the market all day, every day. It is not their occasional interest, but their full-time job and core talent. They have not only the research and negotiating skills to succeed, but a deep real-time knowledge of markets that can change daily.
Even if someone in your organization has handled transactions, they will not have access to the up-to-the-minute market intelligence of a working broker. These professionals are connected to information that provides you the best options at any given time. Even if you’re not considering moving, this “ammunition”increases your leverage in negotiating with your landlord.
Why should you spend time researching the market, narrowing candidates and negotiating with your landlord and possibly others when a broker will do it for you? Engaging a broker enables you to eliminate non-productive time and spend more of your schedule on your business and family while a competent professional handles much of the legwork. A good broker can also spend time researching conditions surrounding your own landlord, such as the asset’s financing, for intelligence that can be used to your advantage in negotiations
As noted, tenants typically don’t think much about their leases until renewal time. Brokers think about leases every day, and continually keep their clients posted on market trends and opportunities. Establishing a relationship with a broker can elevate your process from a reactive mode that kicks in when the lease is up, to a proactive stance that anticipates opportunities in advance, enabling more effective pursuit when the time comes.
Did you know that renewal transactions are, by far, the most profitable for landlords? One of the best reasons to use a broker is to eliminate what not using one suggests to your landlord: that you do not plan to move, or that you are less likely to drive a hard bargain. Landlords typically believe that if they satisfy you during the lease, you will likely renew and accept their proposed increases. Using a broker will “keep them guessing” and compel them to make their best offer to encourage you to stay.
Organizations regularly outsource for specialized skills outside of their core capabilities, such as accounting or legal counsel. Commercial real estate is a similarly exacting business function, and it is typically the second or third largest expense on operational balance sheets. With so much at stake, it pays—literally—to outsource to a specialist.
A building’s leasing agent is trained to represent and negotiate the most favorable lease terms for the landlord. Below are some of the many reasons tenants utilize Rick Guild in their lease negotiations, a broker who is experienced in representing the tenants’ interests.
Rick Guild has decades of experience solving real estate problems for tenants. He uses an analytical and innovative approach to maximize value for his clients. A majority of his business comes from repeat business and referrals demonstrating a proven formula that is highly regarded in the Tulsa real estate and business community.
Rick Guild has a track record of representing the most reputable companies in Tulsa. In the Tulsa market he has completed approximately one thousand transactions totaling over 775 million dollars. One significant reason tenants choose Rick Guild to represent them is his success in the Tulsa marketplace. Tenants want to utilize his extensive experience and relationships to achieve the best overall lease value. Guild has excellent long-standing relationships with every Tulsa landlord. He knows their hot buttons more than any other broker giving him an advantage when negotiating the most favorable lease terms.
Another major reason tenants use Guild is to have a buffer and an advocate in the transaction. In most cases tenants have valuable relationships involved on either side of the transaction. Utilizing Guild as a buffer will keep parties from getting upset and help preserve those valuable relationships.
Guild is an expert on the Tulsa office market having exclusively leased nearly every major office building. Guild exclusively did the leasing for the 52-story BOK Tower, 41-story First Place Tower, 60-story CityPlex Towers, 23-story and 17-story Williams Towers I & II, 36-story Mid-Continent Tower, and 32-story Bank of America Building among many others. Most other brokers only come into downtown on a “need to” basis and do not have a current understanding of downtown trends. Guild has positioned his real estate offices in downtown Tulsa for decades. This means he is in the market every day and has a live pulse on the market. This experience and expertise proves invaluable when meeting the physical, geographic, and economic goals of his clients.
For over 36 years, Rick Guild has focused extensively on leasing office properties in Tulsa. He has completed more leases in downtown Tulsa than any other broker. Guild has successfully negotiated leases with every major landlord in Tulsa over his 36-year tenure. Landlords want to work with him because they know Rick has a significant amount of highly-desired tenants that he continually represents. Rick’s long-standing relationships with the landlords have been built on his repeated performance and his ability to recognize value creators for both parties. These relationships uniquely qualify Guild to maximize value for his clients.
Most brokers rely on 80 to 90 percent of their business to come from representing landlords. Those brokers sometimes also represent the Tenant in some transactions. But at some point, they want that landlord’s business more than they want to fight to get the “best deal” for the Tenant that they are supposedly representing.
Since Rick represents tenants exclusively, and very seldom landlords, he has no conflicting building listings where he ever needs to represent the landlord’s best interests.
Landlords, especially on renewals, do not take a tenant’s threat to move seriously if they are not utilizing a broker to assist them. When a broker is involved representing a tenant, the landlord knows that the tenant is serious regarding looking at all of the other locations available and will be highly educated on all of the alternative options in the marketplace. This knowledge greatly increases the tenant’s ability to negotiate.
The landlord would love nothing more than to get a lease completed on a direct basis and not have the tenant educated about the marketplace. A highly educated tenant is a landlord’s worst nightmare. Utilizing a broker causes a competitive process to naturally happen between multiple landlords which increases the tenant’s ability to negotiate and therefore saves them money.
Rick gets the landlords to tighten their belts because he is in the marketplace every day and knows exactly which landlords are offering the best economic deals.