Can anyone explain what functions a 'realtor tenant rep' performs, and who would need one?

Just exactly what is a "Realtor Tenant Rep"...and would I need one if I were to purchase a shopping center, or a sizeable medical building? Can anyone explain what functions a realtor tenant rep performs, and who would need one?
In Property Management - Asked by Barbara B. - Feb 10, 2011
Report Abuse
Answer this Question

Answer(s)

Rob B.
Chandler, AZ

Barbara.... A Commercial Real Estate Agent will never call himself a "Realtor", as this term is for those individuals that belong to the National Association of Realtors, and perform largely in the single-family, residential arena.
However, to answer your question as it has to do with the commercial real estate industry, a Tenant Representative can be one of the most valuable individuals employed by any person that is considering leasing commercial space. A good commercial tenant representative can literally save thousands upon thousands of money for a tenant. These are important in the leasing of new space, but should never be overlooked by tenants who are terming out on their lease and want to remain in their current space.
Examples of savings that a commercial tenant representative can engineer are:
1. Early entry months of rent. This is a period prior to the lease that can be negotiated that will allow a tenant to get established in his new space. Or, conversely this will allow an existing tenant to have a few months of non-rental when rolling over his lease. The reasons why a landlord will consider early entry is all economic and a good commercial tenant representative can justify this request to the landlord's representative.
2. Tenant improvement concessions to be paid by the landlord.
3. A delay for the start of the cost of living increases that are to be applied during the term of the lease. Or, a formula to be used that limits the amount to be paid in the out-years of a lease.
4. Free rent during the term of the lease. Often months tied to the term of the lease. A month of free rent each year has an impact on the average annual cost of the rental space for the tenant.
5. Helping to get through the many "boiler-plate" clauses in a lease to make sure the tenant is not signing a totally unfair clause. A good tenant representative will never try to take the place of a good attorney or a good accountant, but will usually know when to recommend the usage of these professionals.
6. A competent commercial tenant representative can also work other landlord concessions into the lease that will equate to further tenant savings.
To provide an example of the tremendous savings, examine what $3 per square foot of tenant improvements paid for by the landlord, three months of early entry, a cost of living increase of 3% that does not start until the 24th month, and a month of free rent each year will do in savings for just 1,000 square feet of space on a five year lease that is leased at $1.50 per square foot, rather than the landlords, "bottom line" price of $1.60 per square foot.
$3.00 sf of tenant improvement = $3,000
$1.50 x $1,000 x 3 months early entry = $4,500
3% x $1,500 x 12 months = $540 + $16.20 not compounded the 3rd year, 16.69 year four and 17.19 year five, (the smaller amounts coming from the compounding each year of the subsequent years)
One month of free rent in years 2, 3, 4 & 5. If the rent was $18,000 annually for the full 12 months and a month of abated rent is given this would be reduced to $16,500 annually, which if then divided by the 1,000 square feet effectively reduces the rent from $1.50 sf to $1.375 per square foot. (Or simply put without factoring COL increases would be a total savings for the four years of $6,000).
This will give you some idea about why with just 1,000 sf of the potential, laundry list of area of tightening up the costs of a lease that can be exercised by a good tenant representative. Barbara.... A Commercial Real Estate Agent will never call himself a "Realtor", as this term is for those individuals that belong to the National Association of Realtors, and perform largely in the single-family, residential arena.
However, to answer your question as it has to do with the commercial real estate industry, a Tenant Representative can be one of the most valuable individuals employed by any person that is considering leasing commercial space. A good commercial tenant representative can literally save thousands upon thousands of money for a tenant. These are important in the leasing of new space, but should never be overlooked by tenants who are terming out on their lease and want to remain in their current space.
Examples of savings that a commercial tenant representative can engineer are:
1. Early entry months of rent. This is a period prior to the lease that can be negotiated that will allow a tenant to get established in his new space. Or, conversely this will allow an existing tenant to have a few months of non-rental when rolling over his lease. The reasons why a landlord will consider

Feb 10, 2011
Report Abuse
Rob B.
Chandler, AZ

Barbara... I apologize for my previous answer. There were a few misspelled words that I corrected. But in the middle of my preparing the corrected copy I got a telephone call and somehow pushed the button that sent the uncorrected copy forward. Please look at my answer for substance and not be distracted by the few words that were indeed misspelled. (This comes from my typing my thoughts very rapidly and simply hitting wrong keys).
Rob Baird, CA RE License #544165 (One of the oldest, active licenses in CA) 951 515-5855 Email: rob@capratecommercial.com

Feb 10, 2011
Report Abuse
Ryan D.
Broker/Agent
Denton, TX

A "Tenant Rep." is a Realtor or Commercial Agent who specializes in finding commercial space for his/her tenant client to lease. In other words he represents the Tenants interest in the transaction. Any Realtor can perform this function; however some prefer to make it the sole source of their business to limit any fiduciary liabilities as well as provided greater service to their clients. If you are looking to purchase a large retail of medical complex I would suggest finding a Broker who only works on the commercial side of real estate and has a really good grasp of the market where you are looking to purchase. Don’t have a residential agent help you buy a commercial building they are just not going to have the experience necessary to navigate this transaction. You may also want that Broker to specialize as a Buyers rep. however a lot of local agents will perform multiple different duties in a smaller niche market so that may not be as important as their overall knowledge of the market.

Feb 10, 2011
Report Abuse
Justin W.
Broker/Agent
Orlando, FL

All,
watch your use of "Realtor", it is a trademark of the National Association of Realtors. Only those that seek out to pay the fee, and pass the classes are a "Realtor". I am a Commercial Broker and I have NOT been a Realtor for several years, even though I have been a Commercial "Realtor" in the past. And by the way, there are "Commercial Realtors" you just have to be a member to be a Realtor. Most commercial agents do not find it needed, because of the concentration of residential agents that are mainly "realtors".
To answer your question, I would agree with most on this post and add that any representative that is on your side and looking out for your best interests, and negotiating on your behalf would be a great advocate for you in this venture. "Don't be a pilot if you can't fly the plane". A true commercial agent with any experience under his belt will be a skilled negotiator, it is what we do on a daily and hourly basis, therefore we know the market well enough to get you the best deal possible in that period of time.
Hope this helps, good luck! go to the link, it has some great general knowledge for office space needs.

Feb 10, 2011
Report Abuse
NATHAN B.
Broker/Agent
Ontario, CA

A Tennant / Buyers Rep is a Commercial Agent or Broker that will assist you with all aspects of locating a property that will meet your investment or location needs. They will also help you in the negotiaion and all aspect of the lease or purchase. It is advisable to also consult with legal council when entering into any purchase contract or lease.
Actually many commercial brokers are also "REALTORS" and belong to the National Association of Realtors or NAR, they have a commercial division and are bound to a strict code of ethics.
From NAR website: "The NAR Commercial, the commercial real estate division of the National Association of REALTORS®, supports commercial advocacy efforts and provides services specifically for commercial members, including education, publications, and commercial market research. NAR Commerical also manages CommercialSource.com, NAR's commercial real estate website, where NAR members can post properties for sale/lease, read industry news, and network. "

Feb 12, 2011
Report Abuse
Chris R.
Broker/Agent
Denton, TX

YOu have used the term "Realtor Tenant Rep" - but then you indicate would you need one if you were to purchase a shoppiong center or medical building. 1st... a REALTOR IS a member of the NAR - National Association of REALTORS - and as such adheres to a code of ethics adopted in 1913 in Chicago that sets us apart from those who are not members. There are thousands of members of NAR that specialize in commercial real estate. The likes of which include such as those with the CCIM or CPM designation - they are REALTORS. It does not only mean residential real estate. I've been a REALTOR for decades and been in commercial real estate from the get go. 2nd... a Tenant Rep is a commercial AGENT (REALTOR) that specializes in finding lease spaces in a commercial property for a tenant who wants to lease. A Tenant Rep might not have the experience and knowledge needed to represent a buyer wanting to buy a shopping center or medical / office building. The commercial arena includes many areas of specialization. In a large market (Dallas area) - you will find agents who specialize being a tenant rep for retail properties ONLY - or medical buildings - or office buildings - or industrial buildings - and they will not work with someone outside their area of expertise. You need to find a commercial broker in your area that can represent you in your quest to purchase a building. You do not need to be looking for a tenant rep. But I would certainly recommend you look for one who also is a REALTOR and will adhere to a code of ethics in dealing fairly with you and all parties. There are many REALTORS who specialize in homes, land, etc. but many are experts in commercial properties. Inquire in your area as to who some are - talk to them and select one who you feel is competent, knowledgeable and properly experienced and credentialed.

Apr 8, 2011
Report Abuse
Victor H.
Broker/Agent
Austin, TX

I am NOT answering the posted question. I wanted to expound on the discussion about the term "Realtor". Since getting my real estate license, I have come across this issue where a person unknowledgeable about the term "realtor" will ask if I am one. My response is "I am in real estate". A few times I explained the what the designation of "realtor" means. In my experience, the average joe doesn't know or care about the designation. He uses the term "realtor" meaning real estate agent. It's the same when I get the "are you a broker" question. I don't think they even know why they are asking that question. These terminologies have be used incorrectly by unlicensed individuals when referring to licensed real estate agents.
P.S. I DO NOT refer to my self as a Realtor or Broker.

Nov 10, 2012
Report Abuse

Welcome to Answers

LoopNet Answers is where the commercial real estate community shares what they know to help each other out. And it's all for free.

Ask a question to get advice from brokers, investors, professionals and local experts.

Answer questions to raise your visibility as a trusted advisor and build new relationships.

Ask a Question

Post Question