Why would an exsisting tenant hire a leasing broker to negotiate a lease causing the landlord to pay a commiss

Why would an exsisting tenant hire a leasing broker to negotiate a lease causing the landlord to pay a commission when the lease already has renewal options. Doesn't the tenant realize that those commission costs end up being part of the lease rate. Wouldn't they get a better deal dealing directly with the landlord.
In Leasing Property - Asked by Michael A. - Jul 4, 2011
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Answer(s)

Frank W.
Broker/Agent
Maryville, TN

The answer is the information the Broker makes available to the tenant. The tenant would hire a broker to research the market, then the tenant could decide if another property may give it a lower occupancy cost.

Jul 6, 2011
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Ann S.
Broker/Agent
White Plains, NY

Frank is right on; unless represented by a professional with knowledge of the market and the specific property how does the existing tenant know he or she is getting a fair deal? Renewals should not be considered any differently than an origianl lease.

Jul 6, 2011
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Jeremy C.
Broker/Agent
Andover, MA

The tenant must believe that the commercial real estate broker will provide them with more savings and reduction of risk than negotiating the lease on their own. In Massachusetts commercial real estate, where we represent many owners of commercial real estate, we ask tenants to make sure they're clear on what their tenant rep is being paid, as the fee will be added to the rental rate the owner ultimately offers.

Jul 10, 2011
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Nancy G.
Broker/Agent
Sandy Springs, GA

I like the first answer too. 1)Tenant may also not be a specialist in leasing nor have the time 2)The landlord would have to pay another agent a fee if the tenant left
I recently spoke with someone who was going to buy and then resigned the lease where they were . This was a residential acquaintance. I asked her one simple question, did you put in the lease that if you found a place to buy, that you could get out of the lease. She repsonded no. It was worth her while to have a better written lease to give her the flexibility on that point and others and was worth the investment of the professional to help her on that point and others.

Jul 13, 2011
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Theodore B.
Broker/Agent
Houston, TX

In my opinion even if a renewal option exists you should hire a broker to test the waters anyway. For example: If there is a building offering more attractive rents and concessions then what your building would offer you if you were to accept the terms of the renewal option then wouldn't you want to renegotiate for better terms ? Remember that tenants don't always move to other buildings located nearby sometimes they want to move to an entirely different submarket. Additionally, all Leases are different but I have found that a lot of times the business terms outlined within a renewal option tend to be ambiguous. I strongly believe that a commercial broker that is a tenant representation specialist will serve well that understands a lease and the market. I specialize in leasing Houston office space to tenants so please call if you or anyone else that you know of anyone that could benefit from our services. Thanks

Jul 14, 2011
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Chris R.
Broker/Agent
Denton, TX

To ensure that the lease rate - terms - renewal, etc. is as good of a deal as he can get compared to other properties in the market place. If other properties can offer a better deal - then the renewal of an existing lease may not be the best answer and/or could enable the terms of the existing deal to be improved and made more attractive.

Aug 27, 2011
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