I have spent my entire career in the commercial real estate field. The commercial real estate industry was built to help owners, investors and developers maximize the value of real estate assets. One of the primary ways to increase value is to increase rents. Naturally then, one of the primary goals of the typical commercial real estate broker is to increase rent and minimize costs for the landlords / owners.
Unfortunately, those goals are often in direct conflict with the tenants who pay the rent. If you asked ChatGPT what the role of a broker is, you would get an answer such as “someone who acts as an intermediary between two parties to a transaction” or “someone who facilitates the process of buying or leasing.”
I’m certain there are many commercial real estate brokers who are very comfortable with representing two parties in the same transaction. I am not one of them. In my opinion, it is impossible to adequately represent a tenant when you also represent the landlord.
The more experience I have had helping tenants navigate the process of leasing or buying space, the more I have realized that my business is not about providing two parties with market information or advising on fair market rent. It’s not just about finding space for tenants!
Representing a tenant is a process. A process that starts with understanding the business and how that business uses space. A process that involves identifying alternate space options and more than one solution. Even in a case where a renewal seems like the obvious outcome, having options is critical. Allocating sufficient time to this process is as important as any of the other steps.
Business owners and executives are concerned about having the right space to execute the business strategy. Layout, location, and function are often more important than cost. As a business grows and evolves, the space they need may changes. Therefore, creating flexibility can be more important that locking in long term rental rates.
Experienced professionals in my field must always be aware of the leverage they have or can create for a particular transaction. Having enough time to execute the process, understanding the business needs, and having alternative strategies, creates optimal leverage. Leverage is much more important to negotiating favorable terms than one might imagine.
Although there will always be more commercial brokers who specialize in representing the landlords, there are plenty of experienced “tenant rep” professionals, like me, who advocate for the users and occupants of the space.
Throughout my career, I have had the pleasure of working with many amazing clients and learning about their unique businesses. Each of my experiences, I am able to take away something that makes me be better at what I do. I am confident when I say, my business is more about “creating leverage” and “advocating for tenants” than it is about “brokering deals.”
Rick Pearson is senior director with the Tenant Advisory Group at Cushman & Wakefield. Learn more at cushmanwakefield.com.