When it comes to commercial real estate transactions, California lawyers and brokers are held to different standards regarding conflicts of interest.
 
Advocacy and Representation
 
Lawyers are bound by strict ethical rules and must prioritize their clients' best interests above all else. Dual representation, where a lawyer represents both parties in a transaction, is generally prohibited due to the inherent conflict.
 
In California, commercial real estate brokers also advocate for their clients' interests but are allowed more latitude in their approach. They can represent both sides of a transaction, known as dual agency, as long as both parties provide informed written consent. While this practice allows brokers to facilitate transactions, it limits their ability to fully represent each party's interests.
 
The Risks of Dual Agency
 
While dual agency may seem convenient, it can create conflicts of interest. Brokers representing both parties may have difficulty providing impartial advice or negotiating aggressively on behalf of one client without compromising the interests of the other. This can diminish the value of having broker representation.
 
Practical Tips
 
When working with a commercial real estate broker, it's essential to ask about potential conflicts of interest. If the broker represents both landlords and tenants, their ability to advocate exclusively for your interests may be limited.
 
Choosing the Right Representation
 
To ensure you receive the best possible representation, consider working with a broker who specializes in representing tenants. This guarantees that they will prioritize your interests and avoid conflicts that could arise from dual agency.
 
At CroninCRE, we exclusively represent tenants. Never landlords. We provide real estate advocacy negotiating on our client’s behalf without conflict of interest. 

Whether you’re a startup seeking your first office space or an established business expanding to new markets, your decisions can significantly impact your bottom line.
 
The Familiar Faces
It’s common to know someone in commercial real estate: a kid’s little league coach, college roommate, neighbor, relative, or someone from the commute train. It’s natural to gravitate toward familiar faces when embarking on your leasing journey. However, the familiar isn’t always the best choice.
 
The Dual Agency Dilemma
Over 90% of commercial real estate brokers represent both landlords and tenants. However, this dual agency can blur fiduciary responsibility, leading to conflicts of interest. Tenants may find themselves at a disadvantage, unaware that their broker’s allegiance is divided.
 
Imagine hiring a lawyer who represents both you and the opposing party. Yet, this scenario occurs daily in commercial real estate. Brokers who serve both landlords and tenants face conflicting loyalties, akin to a referee supporting both teams. Tenants often find themselves caught in the crossfire.
 
Renewal vs. Relocation: Leveraging Negotiating Power
Imagine being up for lease renewal, only to discover new tenants securing better terms. This discrepancy highlights the pitfalls of dual agency. Landlords and their brokers know most tenants opt for renewal, stripping away negotiating leverage. A tenant representative treats your renewal as a relocation, exploring alternative options to restore negotiation leverage.
 
Beware of the “Scarcity Wolf”
Landlord brokers may create a sense of urgency by claiming that their available spaces are in high demand, even in a market with vacancies. Tenant representatives focus on finding the best value and exploring multiple alternatives without pressuring into disadvantageous deals.
 
The Tenant Representative Advantage

• Conflict-Free Advocacy: Tenant representatives serve as unwavering advocates, maintaining a fiduciary duty to represent your needs despite being compensated by the landlord.
• Negotiation Prowess: When negotiation time arrives, tenant reps possess in-depth knowledge of the market, key players, and lease intricacies. Whether it’s lease terms, rent concessions, or renewal options, they act solely in your best interest.
• Market Insights: Tenant representatives function like walking AI apps for the local market. They’re well-versed in which buildings hide hidden gems, which properties are well or poorly managed, emerging submarkets, and where the best deals can be found. Their insights empower you to make informed decisions.

 
Conclusion
Consider the power of exclusivity before relying on familiar faces. A tenant representative is more than a broker; they’re your strategic ally in navigating real estate decisions. In commercial real estate, having someone exclusively in your corner is essential.

At CroninCRE, we exclusively represent commercial real estate tenants, focusing solely on finding value and representing clients' best interests without conflicts of interest.