Some office tenants believe that negotiating directly with the landlord will save money since they won’t have to pay a leasing commission to the tenant’s broker.  This idea can cost tenants an enormous amount of money over the lease term.  How?

Beyond just base rent, landlords are extremely skilled at recovering transaction costs in other areas such as:

  • Reduced tenant improvements or base building upgrades
  • Lower rent abatement
  • Incorrect base year operating expenses and real estate taxes
  • Inordinate utility costs with markup
  • High security deposits
  • Inaccurate pro rata share
  • High construction management fees
  • Turn-key buildout

Also, professional landlords include leasing commissions in their operating budget, recognizing that at least 80 percent of the time, they will be dealing with their own agent as well as a tenant’s broker.  If a tenant transacts a lease themselves, the landlord will have the upper hand since they have an experienced leasing agent advising them.  They also possess market knowledge and expertise not available to an unrepresented tenant.  So, if a tenant is paying the commission anyway, doesn’t it make sense to have someone representing their interests?

With a “tenant rep” advisor, tenants are better equipped to make a fully informed real estate decisions and to ensure they are fully apprised of market conditions, lease terms and costs, as well as landlord strategies that can negatively impact them.

Please feel free to call Hank Amabile or Mitchell Jacoby at Beacon Street Realty Advisors @ 617.775.6200