Building A Mutually Beneficial Relationship with your Real Estate Broker
Select a broker whose core interests are understanding the value of treating you as family while negotiating lease terms that support your business future. Our team of brokers will collaborate with you, help you understand the different types of brokers and leases, while explaining how terms like zoning, accessibility, and gross up factor affect lease agreements.
Our intimate knowledge of small-to-medium businesses (SMBs) and local markets provide you with sound decision-making strategies that help you select the right property, while aiding you in maintaining your competitive edge during your transition.
Collaborate to Make Informed Decisions
The initial part of the collaborative process comes from meeting with your stakeholders. By accomplishing this first, you can decide what parameters are negotiable and what parameters are non-negotiable and convey those to us. Stakeholders should also define what your company’s expectations and projected benefits are regarding your move or lease renewal. The second part of the collaborative process are the ongoing consultations with us to identify properties or tenants that fit your parameters.
Working together to make informed decisions helps us build an agile relationship that focuses on people, using an integrated team approach, that is mutually beneficial.
It’s helpful to know a few facts about brokers, commercial leases, and deal negotiations before you meet with your company’s stakeholders.
Leasing Agents and Tenant Brokers
Brokers represent both landlords and tenants. Leasing agents represent landlords who need to find the right tenants for their commercial buildings. Landlords usually pay leasing agent fees. Tenant brokers represent tenants who are looking to lease or renew commercial space from a landlord. Tenants usually pay tenant broker fees. All this will be spelled out in your brokerage agreement.
Brokers do the legwork so you can concentrate on your business. With your parameters in hand, our brokers will find you several locations to choose from that have your required amenities and services. They will know landlord history and what companies in your selected location might be anchor tenants so that they can explicitly explain what this means to you and how it may affect lease options.
The Three Types of Commercial Leases
Costs and fees are assessed differently depending upon the type of commercial lease you want. The leases are to protect both the landlord and the tenant.
A full service lease, also known as a gross lease, is all-inclusive, (rent, utilities, services) for a base year. It’s important to understand how the lease’s language defines a base year. Some pertinent questions to ask are: Is the base year a full year from the signing of the lease or a calendar year? What if the landlord’s costs go up? Will you be required, once the base year is over, to pay more?
Net leases require the tenant to pay rent and “usual” property expenses that a landlord would pay. That usually means a proportional share of the property taxes, landscaping, utilities and janitorial services, for example. The three types of net leases are single, double and triple. Each defines expenses differently.
A modified gross lease combines the full service lease with the net lease. It’s not exactly a hybrid, and there’s more than a nuance of differences between them. Modifications, however, can be more equitable than the net lease alone.
Whichever lease fits your SMB, make sure that you understand what your base rent will be, the time frame involved, and what constitutes rentable and usable square footage. This can make a significant difference in your base rent.
Negotiating the Deal
Negotiating lease terms can be complex. First, round one: the actual deal terms, all the parameters, must be acceptable to the landlord or the tenant. Will your employment agency be the only one in the building? Will your mom-and-pop coffee shop be competing with a major coffee chain inside the anchor supermarket? Will your tenants be able to sublet should they go out of business before their lease is up? These are all questions that we can target in our lease negotiations.
The second round of negotiations centers around the lease document itself. No standard lease suffices when our core values are family, loyalty, entrepreneurship, courage, communication and stewardship. Every detail is scrutinized in the best interest of our clients. It’s our job to facilitate an equitable relationship that minimizes risk for all involved.
Brokers, especially brokers specializing in the intricacies of their local market, possess an agile, analytical knowledge of current available properties by talking to people, building networks. These networks coupled with intimate market knowledge create the professional credibility that begets mutually beneficial relationships that get the deal done.