Four Ways Tenant Representation Can Help With Lease Renewals
March 15, 16
When leasing office space, there are many factors to consider when it's time to renew the lease. Having decided to renew, many business owners decide to deal directly with the landlord in negotiating and signing renewals agreements, however there are a number of reasons to engage a professional who can represent your needs most effectively.
Engaging a tenant representative, at the right time, is an often overlooked step that can provide a number of benefits to you as a tenant.
First and foremost, it is important to understand that engaging a tenant representative to assist you with your lease renewal will not cost you a penny. Most lease deals have commissions built into the pricing; when a tenant deals directly with the landlord, the in-house leasing team takes the commission because there is not a tenant representative to share it with.
Here are four reasons why it is in your landlord's best interest to keep you as a tenant:
1. When tenants renegotiate on their own, landlords know they can charge higher rents. When working with a tenant representative, sometimes renewals can even end up in tenants paying lower rent! Most tenants don't have the time or resources to investigate whether the rent in current leases is still appropriate based on local market conditions. By leveraging this knowledge, a tenant representative can ensure that your lease terms for your renewal are fair and appropriate.
2. Renewals are profitable for landlords. If the landlord needs to find a new tenant, they will end up paying the full commission to a tenant representative, and there is no guarantee they will find a new tenant right away. When a lease is renewed, however, the landlord does not need to use its own dollars for tenant improvements and leasing commissions.
3. When the landlord does ultimately find a new tenant, the new landlord-tenant relationship is going to cost them money for leasing costs, legal reviews, new tenant improvement dollars, etc.
4. In addition to the direct and short-term out-of-pocket costs your landlord will incur if you move, your landlord knows they will be impacted in other ways too. For example, if the landlord wants to refinance their loan for the building, terms and loan approval will be based on the net operating income for the building; changes to that income because a tenant didn't renew a lease can be costly to landlords in the long run.
For all of these reasons and more, engaging a tenant representative broker is a smart move. Contact us to represent your interests.