You have finally made the big decision to start your own business. You have acquired your business license, you are registered with the state, you have determined the legal structure of your business, and your funding has been pre-approved. Now there’s only one thing left on the list to deeply consider…where exactly is my business going to live? While you may know the general area in which you want to operate, there may be some things you want to consider to help avoid pitfalls and turn your commercial space into a cardinal value.
The reason you decided to start your own business was because you found a gift within yourself that you wanted to share with the world. You are good at your craft and you know you can make money doing what you love. That is the epitome of entrepreneurship. Researching the real estate market and conducting lease negotiations is not. What is a business owner to do? Don’t fret. There’s a solution that makes sense.
You need the protection of a Tenant Representation broker or “Tenant Rep” for Short. A tenant rep will save you time, energy, and most importantly, money. Once you have provided your tenant rep with your desired geographical location, the amount of square footage or the number of people that will occupy the space you are looking for, and how much you want to pay in rent, in turn, they will provide you with a market survey filled with available properties that lie within your specifications for your review. They will also provide you with pricing for each property so you can determine which locations could realistically fit within your budget. Once you have narrowed your interest down to three to five locations, let your tenant rep know which properties you are interested in seeing and have them set up a tour for you.
After visiting all the properties on the tour, you know which two locations are your favorite. Your tenant rep contacts the landlord rep to inform them that their property has made the short list (yay!) and sends over a RFP (request for proposal). A RFP simply asks the landlord rep to ask the owner what is the best deal they can offer you, the prospective tenant. Once your tenant rep is in receipt of the owner’s initial offer, negotiations will begin. This is where one of the biggest parts of the added value of having a tenant rep comes in. If you, the prospective tenant, contacts an owner or a landlord rep on your own, they are only going to offer you asking rent with no room for negotiations. A tenant rep will always counter the asking rent and will create leverage for you to save you money in the long run. A good tenant rep will also advise you to have a real estate attorney review your lease before you sign it. A landlord rep or an owner certainly will never advise an unprotected, prospective tenant to have their lease reviewed because they don’t have your best interest at heart.
As you can see, it only makes sense to go into a commercial real estate deal protected. You don’t want to find yourself at the short end of the stick negotiating a deal by yourself in an unfamiliar industry with unfamiliar language and practices. You could easily find yourself in a bad deal which could distract you from your primary goal…to run your business. It’s best to go into a commercial real estate transaction of this nature with a tenant rep who will fight to get you the most aggressive terms available for the space you are interested in. If having a tenant rep on your team wasn’t good enough, you won’t ever have to pay them a single dime. A tenant rep works for you for free and gets paid from the landlord. You just can’t lose in this scenario. Engaging a tenant rep broker is the best move for any serious entrepreneur who is ready to acquire commercial space to take their business to the next level.