Having Tenant Representation means that you acquire an independent third party to advocate for your best interests within the realms of a leasing transaction. It also means that you engage an expert to carry out a task that can be quite foreign to most CEO’s, Directors and Operation Managers. In general, a business will need to find a new space or negotiate a lease renewal every 5-15 years. Having a lack of experience around market conditions, lease negotiation or industry contacts not only leads to a substandard deal but also a massive amount internal resourcing being swallowed up. At Liberty Leasing we empowerTenants to focus on their strength of running a business while we focus on ours – securing the best lease deal and managing your lease transaction.
What does a Tenant Representative do?
During commercial negotiations, a Landlord has its best interest represented by an Agent of a Leasing Executive. Who represents the best interest of the Tenant? We do! And we only represent Tenants, making our services conflict free – every time!
Not only will a Tenant Representative secure friendly and flexible lease terms, they will also scour the city to find the optimal premises for your business based on your unique needs. A Tenant Representative isn’t hindered by a specific Landlord or Agency. At Liberty Leasing we define your needs and then, by leveraging our industry contacts, we will brief key market players – bringing a wealth of options to your door step.
The fundamental principles of our effective Tenant Representation are simple – and the benefits are enormous.
The Status Quo
When you are engaging in commercial lease negotiations with an Agent or Leasing Executive, that person has a legal and ethical obligation to their client or their employer (whatever the case may be). Their client or employer is the Landlord. They are trying to sell you on one particular site – their site. And they are trying to sell it to you on their terms.
Agents and Leasing Executives may seem helpful, but their income is derived from the Landlord and consequently their interests are aligned with the Landlord, not you. It is impossible for these parties to provide you with the advice that is in the best interest of your business. But despite this, and without Tenant Representation, Tenants are motivated and moved forward based on their interaction with these third parties. And that can have long term consequences.
When you acquire Tenant Representation your interests are protected throughout the lease transaction. At Liberty Leasing we fiercely negotiate for these interests to get a deal that meets the needs of your business. In addition to this, with Tenant Representation you are being presented with a more comprehensive picture of the market and your options. Tenant Representatives procure multiple sites and negotiate key terms with multiple Landlords – empowering you with the knowledge to make the best decision for your business and its future success.
The Cost Benefit Analysis
Not only does the property market move in cycles, but certain types of tenancies are impacted by some additional external factors. For example, leasing deals within shopping centres are impacted by e-commerce growth. The leasing deals for pharmacies are impacted by Pharmaceutical Benefits Scheme and exclusivity regulations. It is unreasonable to expect Tenants to be aware of these moving factors, let alone have intimate knowledge of them and then leverage that knowledge to get the best lease deal.
Having a Tenant Representative on your side and representing your interests at the commercial leasing stage is invaluable. A person that can advise you on the market, lease terms and commercial terminology is an unparalleled advantage for a Tenant during lease negotiations and lease renewals. However, if we HAD to put a price on it – here are some of the ways that our Tenant Representation services saves our clients money:
- we often produce in excess of a 20% saving for our clients over the lease term through either rent reductions or incentives;
- we negotiate more favourable (and cost saving!) lease terms such as reduced make-good obligations;
- a site selection process ensure that you secure a premises that meets the needs of the business AND its staff. This can result in a higher staff retention rate – meaning reduced hiring and training costs; and
- our services include transaction management. We liaise with stakeholders and third parties during the lease dealing. This gives the business leadership team the capacity to focus on the important stuff – running the business.
By engaging Tenant Representation you are protecting your business interests in a transaction which can ultimately be a multi-million dollar investment. You wouldn’t invest millions in the stock market without professional advice. You wouldn’t sign the lease without legal advice. So it makes sense that you shouldn’t source and secure commercial real estate without a Tenant Representative advocating for your business, in a manner which is reflective of the market conditions.
If you want to explore the benefits of Tenant Representation further, you can get in touch with us on (07) 3359 8273 or book an appointment online here.