Why working with a broker who represents both tenants and landlords is an advantage?
In the world of commercial real estate, tenant representation and landlord representation are distinct roles, often filled by separate brokers. But when you’re a company seeking space, does it truly benefit you to choose a broker who only works with tenants?
Tenant-only brokers often argue they offer a more dedicated advocacy, free from the potential conflicts of interest that might arise when a broker also represents landlords. As a commercial real estate broker with extensive experience representing both sides, I’m keen to challenge this notion.
First, let’s consider the realities of a broker’s business. Landlord representation work demands significant time and effort – from crafting marketing materials and constant communication with both brokers and the landlord to managing showings. Some brokers naturally gravitate towards the business development aspect of tenant representation, while others prefer the balance of working with both. The split isn’t a matter of right or wrong; it’s about individual strengths and business strategy.
Now, back to the core question: Is a tenant-only broker inherently better for a tenant? While they may claim to be fiercer advocates, remember that in commercial real estate, the landlord invariably pays the commission. Furthermore, strong relationships with landlords are crucial for any tenant broker. These broker-landlord connections ensure your deals are taken seriously and that your broker receives timely and accurate information about all building activities. While tenant-only brokers may not represent landlords directly, they are constantly building rapport through industry networking, lunches, cocktails, golf, etc. – and they are still being compensated by the landlord upon a successful deal.
Consider this: As a tenant entering negotiations with a landlord, wouldn’t you be better served by a representative who understands the landlord’s perspective firsthand? Successful negotiation hinges on understanding the other party’s priorities, their areas of flexibility, and their absolute non-starters. Representing landlords provides invaluable insight into their thinking, equipping a broker to better manage your expectations and advise you on when to push and when to concede.
Navigating the world of commercial real estate brokers can feel overwhelming, with everyone positioning themselves uniquely. While the arguments for tenant-only representation may sound compelling, it’s vital to do your due diligence and ask probing questions. Choosing the right broker is a significant decision. Prioritize qualifications, experience, market knowledge, and ultimately, the best overall fit for your specific needs.
I’d be happy to discuss your commercial real estate requirements and share my extensive experience in representing both tenants and landlords.
Paul Walker 212-984-7117 Paul.Walker@cbre.com
A commercial real estate broker specializing in all facets of office leasing for over 30 years, I’m also a proud native New Yorker with a deep love for this city. My commitment to my community is reflected in my founding of two real estate charity events and consistent involvement in professional organizations. Outside of work, I enjoy live music, movies, basketball, tennis, podcasts, and a continuous pursuit of knowledge, especially regarding history and the fascinating story of New York.