In Phnom Penh City of Cambodia, finding office space that best fits their space needs, location, price point, and amenity wishlist may seem daunting. Some companies throw themselves into this process head first, excited about the prospect of discovering a new space for their business endeavors, and then sealing the deal. Whichever group you’re in, having tenant representative on your side to guide you through property comparisons, needs assessments, and detailed lease negotiations is not only invaluable – it’s been shown to SAVE tenants A LOT OF MONEY.
What Is Tenant Representation (tenant rep)?
When commercial real estate landlords lease office space, they hire a leasing group (brokerage firm) to represent their best interests. These include marketing, negotiating, and securing a tenant under contract at the highest fee possible. This is done to ensure that landlords’ costs are covered and that they profit from lease agreements.
Tenant representation, on the other hand, is about representing the tenant who is looking for office, warehouse, retail shop, or other commercial space. Tenant representatives serve tenants for free. This may seem too good to be true, but in reality, the process is set up to protect the tenant. Here’s how it works: the listing brokerage firm signs a contract with the property landlord. If no tenant representative is hired by a tenant, that landlord agent gets the entire negotiated commission fee when a lease is signed.
However, when a tenant representative is present, the commission is split with them. In other words, your landlord pays for you to be represented by an industry professional, tenant rep.
That’s just the tip of the iceberg when it comes to the benefits of hiring a tenant representative.
Benefits of Hiring Tenant Representation
I. Works For You And Only You
Tenant representatives are solely there to protect your interests. They help you avoid leases that work great for your landlord but leave you stuck with a less-than-ideal contract.
If you decide to go it alone, landlord representatives are incentivized to negotiate a lease that benefits their boss but may include terms that are bad for you. These may include hidden fees, above-market pricing, and space specifications that don’t fully align with your business needs.
Your tenant representative, on the other hand, only has you and your business in mind. This means that they work with you to get the best lease terms, options, and space to meet your needs. For instance, if you’re considering bringing an ideal tenant rep in-house, your tenant rep may recommend a multi-functional flex space so that your space needs are met for the entire duration of the lease, even if you haven’t made a final decision on the matter prior to signing the contract.
Everyone’s financial plans and situations are different, and that’s why it’s important to get expert guidance that’s personalized to you.
Just as importantly, your tenant representative understands all the hidden costs of lease. Tenant representative informs you of all your lease obligations so you don’t have any surprise expenses. Whether you’re new to leasing or are interested in relocating, expanding, renewing, or taking advantage of your current lease options, having an advocate negotiating on your behalf is invaluable.
III. Provides Expert Space Needs Analysis
More than any other area, tenants miss the mark when assessing their actual space needs. They do tend to consider the desired environment and locale of the commercial space they’re seeking. However, they fail to apply deep analytics of business processes, staffing, clients, market trends and future plans. A tenant representative will use interviews, company data, and software tools to look at:
- How your company functions
- Expansion or contraction plans
- Your workforce
- Your customers
- Space criteria you have
- Your location criteria, etc.
This space needs analysis provides a much more sound strategy for moving forward in finding an ideal property for your business and negotiating the best lease agreement.
IV. Researches Multiple Space Options
The creative space where you build and grow your products, services, sales, and systems is an integral part of what keeps your customers coming back for more. Tenant representatives understand this dynamic, and they are always on the lookout for exceptional leasing opportunities for you.
Another key part of their job is to find multiple properties that meet your business needs. They then perform side-by-side comparisons using market analytics to help rule out spaces that aren’t ideal, such as those that are above market value. ***Providing you with similar options is also a key way to optimize negotiations in your favor.
V. Offers Industry Expertise
Perhaps the most valuable skill tenant representatives offer is their industry knowledge. Navigating the world of leasing types, options, amenities, space configurations, costs, hidden fees, terms, and market trends can be overwhelming. Here are a few ways a tenant representative helps give you peace of mind during this process.
Guidance On Lease Types
Rent is one of the biggest expenses many businesses face each month. Managing this recurring financial obligation can be helped along by the right type of lease. For instance, while a full-service lease provides the most tenant protection by bundling all costs into one payment, it also offers the least flexibility. Everyone’s financial plans and situations are different. That’s why it’s important to get expert guidance that’s personalized to you.
Guidance On Lease Options
Just like with lease types, there are various lease options that can be written into your lease. They address different elements for which a lessee may require flexibility due to the unpredictable nature of business. Some of these include the options to:
- Gain Incentive
- Expand or Contract
Guidance On Local CRE Trends
Trends in regional commercial real estate (CRE) can have a big impact on the price you pay for the properties. For example, tenants looking for office space who are willing to sublease will do particularly well due to the large number of corporate lessees looking to minimize space rent that was previously occupied by staff who are now working remotely. Tenant representatives keep on top of these market patterns. They use them to connect you with properties that meet your space needs while giving you the most bang for your buck.