There are two parties in a commercial real estate transaction, the Tenant and the Landlord. Each party to the transaction deserves and warrants representation. It is customary for the Tenant to engage a real estate professional (Broker) to represent their interests, just as the Landlord engages a broker to represent their interest. Property listed for lease is advertised by the “Listing Broker”. The Listing Broker is an individual and/or firm engaged by the owners of property to assist in representing the owner’s best interest in the transaction. The Listing Broker’s role is to uncover prospects interested in leasing the “Listed” property. The Landlord’s representative negotiates the best possible terms for his client. Obviously, having the same individual/firm representing both the Tenant and Landlord, creates a potential conflict of interest. If you are represented by the Landlord’s broker, are you properly represented?

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“Your goal in engaging a tenant representative is to obtain true economic savings and secure space on terms that best serve your needs over the life of your lease.”

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The brokers are paid by the property owner or Landlord. These fees are consideration for representing both Tenant and Landlord in completing the transaction. Once the Tenant’s broker is engaged by a prospect, it is the duty of that broker to present all possible opportunities which might fit the Tenant’s requirements. Since the broker is not compensated until the transaction is completed, it is absolutely critical that the party engaging a broker does not engage more than one broker at a time. The terms of engagement must be clearly understood by all parties prior to any action being taken by either party. Generally, engaging more than one broker at a time is a duplicate effort and, fundamentally, a bad business practice. A broker has only his time to offer to his clients. If the broker knows his efforts are being duplicated by others, he is unwilling to commit all of his time to service the tenant’s needs. When that happens, the client only sees the “Easy to Present” deals and both parties lose.

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“Hiring a tenant representative who acts on your behalf can eliminate many of the hassles in site selection and negotiations. It can prevent missteps and turn up real economic opportunities.”

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When a Tenant commits to working with one broker, a partnership is developed and information is shared at a different level. The Tenant can invest more time (with his broker) sharing his requirements and specific concerns he may have regarding the transaction. With a better understanding of the client’s needs, the broker will be able to develop better options to his client, creating a win-win situation.