Commercial Real Estate Brokers Role in a Commercial Lease Transaction

In most cases when you are leasing commercial real estate space (office, retail, or warehouse) there will be one or two commercial brokers involved so it’s important for you to know who represents who in the transaction. Knowing this information can have a huge impact on the outcome of the deal you get.

The Landlord Agent / Broker
Landlord agents are also known as Landlord Representatives, or Listing Agents. When an individual or investment group buys a commercial building they typically hire a landlord agent to help them lease the space. They represent the buildings owners best interests. They may either only lease one building for the owner or could lease a portfolio of buildings for the owner in a given market.

Leasing commercial real estate Austin properties can be very competitive so landlord agents should have strong market knowledge of rental rates and lease concessions for comparable properties in an area. Also knowledge of occupancy trends and marketing strategies helps them to ensure that building owners get the highest lease rates and best terms possible.  They will not tell you insider information to give you an advantage in negotiations such as whether the owner will accept a lower lease rate or give more tenant improvement dollars.  Their job is to help their owner make as much money as possible.

The Tenant or Buyer Representative
Commercial agents that ONLY represent tenants and buyers of commercial real estate are called Tenant Representatives. Their job is to help their clients identify, select, and negotiate office, retail, and warehouse spaces. They represent the Tenants best interests and Do NOT represent landlords as that can be a conflict of interest. Good tenant representatives get to know their clients current and future needs and finds commercial space that can accommodate those needs. They will examine and compare each properties ability to satisfy needs such as lease term, budget, parking, location, expansion options, etc and negotiate those items to ensure that the total package is the best deal possible.

An experienced tenant rep keeps a pulse on and leverages the market in a way to create competition for your tenancy. They will tell you insider information that the landlord rep won’t.  They know what concessions are possible in any given market and will do whatever it takes to get you the best deal.

How Commercial Real Estate Agents Get Paid
Building owners and landlords typically pay ALL the commissions. Whether you have tenant representation or not leasing commissions ARE always being paid by landlords. Commissions are typically 4% to 6% of the overall lease value and are split between the landlord rep and the tenant rep. Again, commissions are being paid regardless if you do not have representation so make sure to put some of those dollars to use for yourself.

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