Understanding the Basics of Tenant Representation

Tenant representation is a part of commercial real estate where an agent focuses on only the tenant’s best interest. It is a type of real estate brokage where the agent works directly with a tenant in search of a property and during the negotiation process.

The process of searching for and leasing a property can be overwhelming, especially when you have a busy schedule. Fortunately, there are agents that specialize in these processes and will help take the stress of property search off your hands while giving you the best deals on the market. These professionals are called tenant representation brokers.

Who is a Tenant Representation Broker?

As the name suggests, tenant representation brokers or tenant reps take care of the tenants’ side of commercial real estate transactions. The duties of a tenant rep include but are not limited to the following:

• Determining whether to renew or relocate
• Searching out perfect spaces for tenants
• Securing the best terms

Determining whether to renew or relocate

One of the first and primary jobs of a tenant rep is helping their client decide whether renewing a lease will be more beneficial than relocating to a new space at the end of the current lease.

Typically, the rep will recommend the client to renew a lease if they are comfortable and happy with the current lease terms. However, if the client absolutely wants to relocate, the rep is obligated to see the relocation process through as well.

Searching out perfect spaces for tenants

Say the tenant doesn’t want to renew the current lease and would like to get a new space, the tenant rep’s job for this process is broken down into three basic stages.

• Client’s needs assessment
• Market survey
• Physical tours

Client’s needs assessment

In this stage, the tenant’s real estate needs are discussed. This typically includes, location, size, growth potential, terms, and the quality of office spaces. This stage is usually quick as most times, the client already knows what they want in the new space. However, if the tenant isn’t sure exactly what they want, it is the job of the commercial real estate broker to help smoothen out this stage to move on quickly to the next.

Most often, estimating the office size to lease is what tenants struggle with. Fortunately, this is one of the specialties of a tenant rep. A rep is able to estimate the size of office that would be perfect for the client by taking into account the number of employees they have, what they have planned for their office layout, and the company’s potential for growth. Click here to calculate how much office space you need.

Getting the right space is extremely important for both startups and established companies looking to find a new headquarters.

Market Survey

Once the broker has the client’s specifications, like location, size, and sometimes how old the building is, market survey begins. The rep begins creating a list of available properties that meet the client’s specifications. A tenant rep employs a mix the following to help speed up the market survey:

• Property listing services
• Industry connections
• Market research

During market survey, a broker utilizes the opportunity to eliminate deal killers very early in the survey. Typically, they engage in quick conversations with every listing broker with properties that fit the client’s specifications. Usually, these conversations are about the length of the leasing term. Properties with lease terms that do not align with the client’s are quickly crossed out from the list to narrow it down for the next stage- the physical tour stage.

Physical Tours

In tenant representation, this is also an important stage. Once the list has to been narrowed down to a handful of spaces that are the best fits, the broker takes the client to tour all the properties to make the final pick. Usually, the broker tours these properties prior to going over them with the client in order to note the special features each space has.

Once a date has been set with the listing agent, the tenant rep takes the client to tour the spaces. If done properly, each tour shouldn’t last more than half an hour. During the tour, the client is availed the opportunity to have an in-depth look at each space before making a decision. The deciding factors are usually parking spaces, state of the building, quality of office space, lighting, and other amenities offered.

Securing the best terms

Once the tour is over and the client has made a choice of which space to lease, the tenant rep moves to get the best possible terms for the space. First, the rep sends a formal request for the property owner’s proposal. This proposal contains the terms for which the landlord is willing to lease the space or property. The proposal is not binding in anyway as it only helps to provide a starting point for the negotiations.

Upon receiving the landlord’s proposal, the client sends a letter of intent (LOI) as a counteroffer. In this letter, the client outlines the terms and rates for which they will be willing to proceed with the lease. Naturally, the property owner will object to some of the terms listed in the LOI.

This is usually expected by both the tenant rep and the client. The property owner in turn sends over a counter offer leading to the back-and-forth that is always present in real estate transactions.

This goes on until both entities reach a consensus. Visit https://www.entrepreneur.com/article/253732 to learn more about real estate negotiations.

Conclusion

Having a busy schedule shouldn’t be the only reason for which you hire a tenant representation broker. If you plan on getting the choicest office location for the best terms and rates, you should put in a good amount of time finding the right tenant rep to help you out. Aside from shortening the time it takes to scout for spaces, they help you save money while doing so.

Also, these professionals have an eye for details in spaces and properties you are most likely going to miss. You should bear in mind however, that hiring them will cost you a chunky bit, but compared to the total amount of time and money you’ll save, they are worth the investment.

EAN Content

Content shared by this account is either news shared free by third parties or sponsored (paid for) content from third parties. Please be advised that links to third party websites are not endorsed by Estate Agent Networking - Please do your own research before committing to any third party business promoted on our website. As an Amazon Associate, I earn from qualifying purchases.

You May Also Enjoy

Home and Living

Kitchen Trade Expert Shares Five Benefits of Fully Assembled Units

The UK kitchen and bedroom fitting sector is currently facing a number of challenges. The UK Trade Skills Index 2023 report revealed that 937,000 new workers will be needed in the construction and trade industries by 2032 to meet the demands of the sector, impacted by the widening skills loss posed by Brexit, an ageing…
Read More
Breaking News

Why are HMO numbers falling?

The latest research from COHO, the HMO management platform, reveals that despite little change in tenant demand, house share availability has dropped by almost -60% in some parts of England, raising the question of whether we’re seeing an HMO landlord exodus. COHO’s analysis of house share listings data* shows that in England, the number of…
Read More
Breaking News

Only 27% of homes have been fixed in a £1.8bn Govt programme

Report shows only 27% of homes have been fixed in a £1.8bn Govt programme, as red tape and asbestos keep thousands in the cold Thousands of homes will face another winter of fuel poverty due to a raft of failures as scheme to fix them hits buffers Hundreds of millions of pounds of allocated grant…
Read More
Breaking News

UK House Price Index for July 2025

The latest index shows that: – The average monthly rate of house price growth in July was +0.3%. The average annual rate of house price growth in July was +2.8%, down slightly from +3.6% in June. As a result, the average UK house price sits at £269,735.   Director of Benham and Reeves, Marc von…
Read More
Breaking News

ONS House Price Index – Thoughts from the Industry

Thoughts from the Industry about the latest ONS House Price Index. Nathan Emerson, CEO of Propertymark: “It is positive to see the housing market progressing forward in strength. As we move towards the autumn months, hopefully this momentum will continue. “There continues to be two factors that may weigh heavily on consumers’ minds as they…
Read More
Overseas Property

European capitals hold £76bn worth of property potential

The latest market insight from international property consultancy, Astons, reveals that across seven major European capital cities for property investment activity, the current market holds £75.8bn worth of opportunities. Astons has analysed the current property markets in seven major European capital cities* to see which have the most residential listings and therefore offer the greatest…
Read More