Why Having a Commercial Tenant Representative Is Essential

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.