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Rankin Commercial Properties
Buyer & Tenant Representation
Ask Yourself 4 Questions... Can I reduce my space? ...Is my Landlord giving me a good proposal? ...What are the unknown costs of the proposal? ...Are there better opportunities in the area?
Are you looking to lease or buy commercial space for your company? Has your company recently grown or decreased in size? What are the space issues business owners should understand? When is it appropriate to use an attorney? What can a Tenant/Buyer Representative contribute to the process?
Thorough consideration of these issues is critical to making successful real estate decisions.
A Tenant/Buyer Representative will begin by helping the client to define specific requirements and objectives, and by providing market research and space alternatives meeting those objectives.
After identifying a variety of space alternatives, the Representative will provide further assistance in negotiating the terms of a lease, and ultimately signing a contract for space that best meets the needs of the tenant/buyer.
Leasing or buying space directly affects both your company’s operations and your employees’ well being. Use of a Tenant/Buyer Representative helps to ensure that this critical decision is the culmination of a professional assessment.
Every Business Needs Space...
Your primary business is running your company. Ours is negotiating real estate.
How often do you lease or buy space? Hopefully, you don’t have to do so more than every 3 to 5 years or so; the same with lease renewals.
The fact is, that you only negotiate commercial space a few times in your business life.
Landlords on the other hand rent space over and over again. They even hire a listing agent to help market the property as well as advise them. The same goes for Sellers.
Do they have an unfair advantage?
Of course they do.
How do you balance this unfair advantage?
Engage the services of your own qualified tenant representative.
How are Tenant Rep's Paid?
Many tenants have a fear that by engaging the services of a tenant / buyer representative they will end up having to pay more so that the landlord / seller can pay the tenant / buyer representative.
Typically, what happens is the fee, often 4% to 6% of the gross lease amount, is split between the tenant / buyer representative and the landlord / seller's agent. There really is no additional fee tacked onto the rate and you won’t save anything by not having representation . The listing agent, who represents the Landlord or Seller - no matter what they tell you - will get the whole thing.
Renewing A Lease?
Using a Tenant Rep during renewals is as equally as important as using one to relocate or find new space.
When renegotiating the business terms of your lease, you will need a market survey accompanied with alternative locations and diverse offers to successfully convince a landlord to give you a better deal… no matter how good your relationship is to them.
Remember, brokers are actively engaged in the day to day commercial real estate market. They know what's fair, you don't.Why Use Rankin Commercial Properties?
With its integrated assets, Rankin Commercial Properties (RCP) formulates and executes buyer and tenant representation assignments by helping tenants and buyers meet their objectives in key markets and locations. It’s powerful history in leasing, investing, and asset management, supports its brokerage professionals with strategic development and financial analysis of alternatives. RCP analyzes each buyer or tenant's business objectives and matches them with the most advantageous real estate solution.
Rankin Commercial Properties offers services for relocations, consolidations, subleases, acquisitions, dispositions, strategic planning, demographic and site consulting, comparative financial analysis, construction, and post-occupancy services.
Working With a Tenant Representative to Find Space:
Are you looking for property? Work with one of our professionals to find Space in the North Carolina Market.
For Tenants / Buyers...
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DIRECTION: Acts as your guide through the leasing process
- LOGISTICAL KNOWLEDGE: Analyzes your space needs to avoid leasing too much or too little space
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MARKET KNOWLEDGE: Shares their knowledge of asking rates and incentives available in the market
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CONTRACT TERMS: Assists in negotiations to obtain terms that meet present and future needs of your business and avoids critical mistakes
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BUFFER: Serves as a buffer between you and the landlord to keep your relationship with the landlord cordial
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DOCUMENT KNOWLEDGE: Handles the paperwork necessary to complete the transaction and other details of lease negotiation.
Although Brokers are not Attorneys and do not attempt to carry out legal consultation, they can evaluate the lease document’s function in normal and customary market situations. Some institutional landlords use the same lease throughout the country without taking into account regional differences. Local Landlords often reuse the same lease they have used for 10-20 years even though times have changed. -
TIME Most office decision-makers do not have the time to devote to a successful office relocation. Broker do the majority of information gathering, while decision-makers do just make decisions.
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Experience Tenants usually relocate once every five or ten years. They cannot compete with the in-depth market knowledge of the commercial real estate specialist who is involved with the marketplace on a daily basis. Commercial Real Estate Brokers who know details of recent deals in the market have resources for negotiations that are not available to tenants.
What goes into finding Space?
Companies faced the question of relocating, have to make a significant of complicated decisions. No matter the company's size, large or small, evaluating alternative space options is the same--a complicated, painstaking, and time-consuming process.
Having plenty of time is an essential contributor to the relocation process; users occupying less than 10,000 square feet should have at least nine months from the space survey until the move-in date; users who need more than 10,000 square feet should plan for approximately nine to 18 months or longer.
Some of this time is needed to sort out the many questions and alternatives that present themselves.
Such As:
Number of properties to investigate.
Negotiating Strategies with the Landlord / Seller
How to compare properties on a shortlist
Parking Ratios
Operating-expense and Pass Through Expense calculations
Renewal or Expansion Options
In recent years we have seen these factors be more complicated in the Triangle Area from excessive amounts of office space available and the differences between the quoted rental rate and the lower rates that can often be negotiated due to the market’s current climate.
Higher a broker before your search begins. Finding office space contacting the agent, then hiring your own agent to help negotiate usually confuses and complicates the entire process.
Don't work with multiple Brokers, companies sometimes hire multiple brokers while simultaneously delegating the space search amongst several internal managers. This situation only results in conflict and confusion often causing landlords to be less negotiable. Most brokers have access to the same information they will bring you the same properties. If you are serious about finding space, take your broker seriously DON'T HIRE MULTIPLE BROKERS!
Renewing your current lease is even a decision that warrants careful thought and planning by the tenant. The Real Estate Market is constantly changing, an attractive renewal rate offered in a contract signed five years ago may not be as attractive in today’s market. Hiring a Commercial Real Estate Broker in Lease Renewals is essential.
Being well represented is coinsides with being well informed. In Market Conditions where relocation alternatives are abundant and tempting, landlords are likely to give more concessions. Landlords are competitive only when they have to be. Hiring a broker in Lease Renewals could save you 15-20% from the landlords initial offer.
Landlord's will incure significant costs if the tenant vacated. These costs include:
Rental Losses
Marketing costs
Brokerage Commissions
Landlords always prefer to pay a commission to retain a tenant rather than sit vacant space and pay for a new tenant with no proven rental history with them.
A Request for Proposal (RFP) is valuable in the negotiating process. It outlines the tenant’s "wish list" for rent, terms, conditions, improvements, expansion, and a number of other crucial items.
In order for the Request for Proposal to be well recieved it should be properly prepared and presented to landlord's and their brokers.
Asking for too much often terminates negotiations with many property owners; sensitivity is critical to the success of negotiations.
Brokers Work For Commission: You won't get a discount by working without a broker.
Most Landlords are working with their own broker, the commission is then split between their broker and your broker the fee is not discounted just because the tenant walks in the door without representation. Besides, who wants to be represented by the opposing party’s broker? You would't do it in court.
Brokers often save clients 15-20% and are only paid 2-4% by the landlord. Would you rather save 2-4% or 15-20%?
If a Landlord does not have a broker, he isn't going to cut you a deal beacuse you don't have a broker. Most likely the Landlord will use the situation to his best adavantage.
Tenants without representation often make direct deals at above-market rents due to their lack of market experience.
Tenant brokers can provide users a number of useful reports:
Discounted cash-flow analyses of the various alternatives and evaluations of free rent, tenant improvements costs that go beyond standard building allowances, parking charges, base rent increases, operating expense calculations, and options to renew and/or expand.
The operating expense bases are often the subject of Landlord / Tenant lawsuits. Landlords who offer future expense estimates that are sometimes unrealistically low give cause for litigation when tenants receive their first-year "increase" bill. Brokers can normally negotiate terms to these expenses that keep them reaonsable. We have seen some clients have 100% annual increases 5 years in a row on their operating expenses. Brokers also know what is reasonable for these expenses and can compare them to other properties.
Simply Reviewing the base-year may not provide a true comparison between property alternatives. Many buildings have equipment with service contracts that upon expiration can cause increased operating costs, or a building may be up for a property tax re-appraisal that might increase operating pass-throughs.
After-hours HVAC costs. The cost of after-hour usage can vary substantially, ranging from $10 per hour in small buildings to $400 per hour or more in large office complexes. Knowing your HVAC requirments and the the buildings regulations directly impacts your operating expenses. Brokers can negotiate and evaluate these terms for you.
Load factors or Core Charges. Are the costs of the building’s shared spaces. Understanding how the Core Charges / Load Factors are determined and calculated is extremely important when evaluating space.