In commercial real estate when you hear the term “leasing brokerage” it typically refers to a commercial real estate company that represents building owners in the lease and sale of commercial properties. You may also have heard them referred to as landlord representatives, listing broker, listing agent, landlord brokers, landlord reps, leasing brokers, etc.
Their fiduciary duty is to represent the best interests of the building owners by marketing and leasing space to prospective tenants and negotiate the highest lease rates and best terms possible.
In most cases large office, retail, and warehouse properties are owned by investment companies or real estate investment trusts (REITs). In many cases these companies are not local so they hire a local commercial lease brokerage to help them with the marketing and leasing responsibilities. They also lean on the leasing brokers for market intelligence which helps them position their properties to compete with other properties and determine the highest possible lease rates they can charge tenants at that point in time.
How Do Commercial Lease Brokers Get Paid?
Buildings owners pay all commissions which are typically 6% of the total lease amount after a lease has been signed. If a tenant representative introduced the tenant to the property then the landlord’s broker splits the commission with the tenant rep.