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Office Space Sunnyvale
March 29th, 2010Commercial Space San Jose
March 29th, 2010Retail Space San Jose
March 29th, 2010Commercial Space Saratoga
March 29th, 2010Office Space Santa Clara
March 29th, 2010Why Tenant Representative?
March 29th, 2010Office Space San Jose
March 28th, 2010Commercial Space Saratoga
March 28th, 2010Why look for commercial space in Saratoga now?
There may be one or more reasons to review your current office, retail, or industrial space position. You may need to lower occupancy costs, improve your current space floor plan efficiency, consider an early lease renewal at fair market rent, negotiate a tenant favorable lease, or evaluate some of the many choices available from hungry Saratoga commercial space landlords. Tenant representatives help you handle these issues.
Space occupancy costs may be reduced by finding a lower base rent when your current lease is over. Sub-leasing space that is not being used following cutbacks can be applied to occupancy costs and bring some relief until the current lease ends. Another mechanism that could be used is to audit landlord pass-through expenses to verify that they do not include misapplied charges, such as capital improvements. Lease renegotiation may work if your landlord will cooperate, thus providing another way to reduce occupancy costs.
Business operations productivity is significantly impacted by layout and configuration of the building. Over time what was once an efficient design can become less than optimum for many reasons. Personnel come and go, technology drives process revisions, new products are introduced and others dropped, all of which impact floor plan efficiencies. To correct the inefficiency and improve productivity, either the obsolete layout needs to be modified with tenant improvements or a move needs to be made to another facility with the proper configuration.
Early lease renewal may be desirable, depending on your current lease agreement. If the lease was made at a higher base rent in better times, there may be an opportunity to exercise an option at current rates, which could be as much as 30% less. Arriving at the rate is what a tenant representative does. He or she ascertains current fair market rental values to justify a reduction in the renewal rent rate.
A tenant favorable lease will include all the necessary business points, make sure they are covered properly, protect the tenant, and assure that there are escape clauses for unexpected damaging events. Rather than have a one-sided lease slanted in favor of the landlord, you get a fair and balanced agreement.
Tenant reps are in the business of helping tenants find commercial space. There are many available lease space choices from Saratoga landlords willing to help you reduce your occupancy costs. Rents are considerably lower than they have been in years. With economic conditions starting to firm, now is a good time to shop around for another commercial space. As is usual for times like these, there are many attractive tenant concessions. Possibilities include free rent, tenant improvement allowances, and other inducements to attract new rent-paying occupants.
So, this is how to find Saratoga commercial space: Use a tenant representative who is familiar with downtown Saratoga. Whether it is for reducing your cost of doing business, increasing productivity with a better building plan, negotiating an early lease renewal, obtaining a more favorable lease agreement, or simply shopping for a bargain, the time for finding office, retail, or industrial space is now.
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No Cost for Tenant Rep
March 24th, 2010Who pays for tenant representation?
Tenant representatives in San Jose, Santa Clara, and Sunnyvale, California assist commercial tenants seeking office, retail, and commercial building lease space. Although they act on behalf of tenants, their fee usually comes from landlords when the tenant rep splits the lease commission fee as part of the listing agreement with the landlord’s listing agent.
There are times that the landlord’s agent represents both the landlord and the tenant, which is dual agency. Although the agent already has sworn his or her loyalty in writing to represent the landlord as his principal, with a fiduciary responsibility to act in the best interests of the landlord, the dual agent then pledges to represent the tenant prospect, as agent, with opposing loyalties. When the landlord’s agent acts as a dual agent, there is always a potential conflict of interest. It is perilous when an agent represents both sides of the transaction.
A tenant is better served with a tenant rep. What the tenant rep does is to perform a site search of all available properties, filter those buildings meeting the tenant requirements, arrange tours of properties the tenant would like to visit, and negotiate letters of intent to lease space on behalf of the tenant. Finally, he or she assists the tenant in negotiating business points for the lease agreement. As exclusive agent for the tenant, tenant reps provide objective, conflict-free advice. Tenant reps do not act as landlord’s agents.
Although landlord agents work to get the best deal they can for the landlord, tenant reps owe their loyalty and fiduciary responsibility to the tenant. The tenant gets a much better chance of a fair deal when the tenant rep is working on his or her behalf.
Heretofore, landlords have had an overwhelming advantage of commercial real estate market information, but with the advent of tenant reps, tenants now have a mechanism to fill the knowledge gap. Tenant reps provide a source of current market data to help level the playing field for the tenant.
Current soft market conditions have created attractive opportunities for tenants. Asking rents are down substantially. There are many quality buildings available for lease. Tenant concessions are generous. However, in order to exploit these opportunities, a tenant should hire a licensed commercial real estate professional as tenant rep.
With local knowledge of current commercial real estate practices, the tenant rep is an unbiased advocate. Therefore, he or she provides the tenant with the information needed to deal with market savvy landlords and their listing agents. The tenant rep helps the tenant obtain the best terms, beneficial tenant concessions, and a fair and balanced lease agreement.
In summary, by utilizing the tenant rep’s knowledge and loyalty, the tenant is able to lower occupancy costs, increase productivity with a better building, and secure a fair lease agreement. The tenant gets advice without a conflict of interest. The good news is that the tenant rep is usually paid for by the landlord, so there is no cost for the service.
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Agent Conflict of Interest
March 23rd, 2010How can a commercial agent represent both landlord and tenant?
It is quite common for the agent representing the landlord, the listing agent, to suggest that a tenant prospect use their “full service” firm because they know the property and the owner well. What is usually not mentioned is that the listing agent has a fiduciary responsibility to the landlord. That means that he must not disclose information detrimental to his principal, the landlord, and has a duty to look out for the best interests of that principal. It is very difficult, if not impossible, to represent a tenant with a similar promise.
For example, say there was a similar property nearby from a different landlord with more favorable terms. If the landlord’s agent becomes a dual agent there is a responsibility to the tenant to act in the tenant’s best interest. How can the agent show the tenant prospect all the available properties on the market and not be in conflict with the listing agreement?
There are other areas of potential conflict. Confidential information disclosed to the agent must not be passed to another. Conversation between agents and tenants usually cover a wide range of topics, some of which could have a detrimental influence on the negotiating position of the tenant. With the possible discovery of sensitive facts about either the landlord or tenant, which party does the landlord’s agent protect?
Tenant concessions that may be offered by some landlords could include items such as free rent, tenant improvements allowances, signage, and other inducements to get them as a tenant. The landlord’s agent likely will not offer anywhere near what you should get. Without a tenant rep, the tenant may not be aware of concessions currently being offered locally and thereby miss valuable components that should be included.
Particularly challenging is the negotiation of the language in each lease paragraph. The tenant’s attorney will represent the tenant on legal issues. Where does the tenant get meaningful support for business questions? Business advice may be required from a licensed commercial real estate professional.
Tenant representatives do not represent landlords. They perform site searches that include all available properties, filter out the best properties that meet the tenant requirements, negotiate letter of intent offers to the benefit of the tenant, and assist in the development of favorable business points of a tenant lease agreement. The tenant has a much better shot at reducing occupancy costs and getting a fair and balanced lease agreement by using a tenant rep rather than a landlord’s agent.
Avoid conflicts of interest when leasing San Jose, Santa Clara, and Sunnyvale, California office, retail, and industrial property by using a tenant rep rather than a landlord’s agent. You get a commercial real estate professional acting as a fiduciary in your best interests. Best of all, the tenant rep usually splits a built-in listing commission paid by the landlord, so there’s no additional cost to you.
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