Business owners have seemingly endless responsibilities on their plate, especially during the early phases of building a company or transitioning to an on-site location. With so much documentation to accomplish and local regulations to keep track of, it’s a miracle for businesses to get off the ground.
A recurring and frustrating aspect of business ownership is coordinating with the commercial real estate industry. It’s hard enough to find and close a deal on a house for you and your family. The process becomes infinitely complicated and stressful if you’ll be leasing retail or commercial space in the long term.
The Commercial Leasing Process
Brick-and-mortar stores thrive in busy locations with heavy foot traffic. When you find a fantastic location for your business, the next step is contacting the landlord and beginning lease negotiations.
Negotiations cover all points of concern in a commercial lease. Details include lease rate, term length, renewal options, rate bumps, concessions, and more. As a business owner, you will need financial documentation to prove your ability to pay the rent.
Viable commercial properties don’t grow on trees, and available locations don’t stay on the market for very long. You need to get through the negotiating and closing process as quickly as possible to get the best property available. This is where your tenant representative comes in.
Responsibilities of a Tenant Representative
Landlords almost always have the upper hand during a negotiating process, especially when they have a commercial real estate agent on their side. Your potential landlord knows that you need their property immediately, so they will negotiate terms that are most favourable to them. No matter how professional and courteous they are, their main priority will always be their own bottom line.
When you hire a tenant representative, they will protect your financial and commercial interests. Tenant reps are experts at the commercial leasing process from beginning to end, handling these three processes:
1. Providing a selection of available commercial properties for your business needs
Since they have expert knowledge of local commercial real estate markets, they can give a shortlist of ideal sites you can look over. They also have real estate market connections that a regular business owner wouldn’t have.
2. Representing you in all negotiations with your potential landlord
A tenant representative works exclusively for you and will negotiate firmly to meet your business’s needs. This service is especially crucial if the landlord employs a commercial real estate agent. When professionals face off against each other, it is a much fairer fight for your enterprise’s benefit.
Experienced tenant representatives can help you negotiate the lowest possible rent as well as the following leasing incentives, depending on the current market:
Rent-free period at the beginning of the lease term
Rent abatement or reduction at a dollar or percentage rate
Fit-out contribution for furnishings and interior design
3. Negotiating lease renewals and preparing the draft terms for the lease
Your tenant representative will ensure that all lease details are documented thoroughly. This prevents you from missing crucial clauses that will affect your payment terms and liabilities as a lessee.
Conclusion
Local commercial real estate markets are difficult enough to navigate. This is why negotiating with a potential landlord’s real estate agent is not something a business owner should face on their own. Tenant representatives have all the experience and knowledge to get you a lease term that suits all of your financial and business needs. Their services are certainly worth the investment!
Lease Negotiation Services has served many entrepreneurs and business owners in the New South Wales area for years. We exclusively represent commercial and retail tenants, and our primary focus is to get the best possible financial deal. If you’re looking for commercial lease negotiation services, get in touch for a free consultation today!