Who Pays for the Tenant Rep Broker?
It is important that you understand the commission structure on commercial real estate transactions before embarking on any brokerage relationship. This is to ensure that your best interests are always protected and that you end up in the right office space and on the right lease terms.
Commercial real estate commissions are, most commonly, calculated as a percentage of the rent due under the lease. The commission is paid to the Tenant Rep Broker upon signing of the lease and is paid by the owner, not the tenant. Tenant Rep Brokers are free to the tenant.
Difference between a Leasing Agent and a Tenant Rep Broker
A Leasing Agent is responsible for marketing the property and represents the interests of the building owner (Landlord). A Tenant Rep Broker represents the tenant in the leasing transaction. It is important to never go direct to the leasing agent if you see an office property that you want to view. Why? Because they only represent the Landlord's best interests. Worse still, if you start viewing properties without a Tenant Rep Broker, trying to bring one on board later on in the process or to negotiate the lease on your behalf, is painstakingly difficult. The key is to establish a good brokerage relationship first before embarking on any property viewings.
Before setting out on your hunt for new office space, decide and appoint a good local Tenant Rep Broker who will represent (only) your best interests when it comes to finding the ideal space. A good Tenant Rep is more than just a good office space finder, they will help you in all aspects of the transaction and negotiate the favorable lease terms on your behalf with the Landlord.
Most Tenant Reps have a representation letter that you will be asked to sign when appointing them. By signing this agreement, you will be demonstrating your commitment to find new office space through them exclusively, and they will work hard on your behalf and earn commission wherever you decide to relocate.
How to find a good Tenant Rep Broker
Search through our comprehensive directory of Tenant Rep Brokers to find one in your local area.
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