Getting Value From Your Broker Services
Are you getting the most out of your broker? What are you getting for your buck?
Does this sound familiar? You decide it's finally time to get some new digs. Whether you realized your lease was up or you're just busting out doesn't matter—it's just time. So what do you do?
Chapter One: Choose your broker.
You call a broker—rather, as soon as the brokers find out you're looking to move, you get swamped by herds of brokers, often several from the same firm, telling you:
They know the market better than anyone.
They have done more "deals" than anyone.
They know the Landlords better than anyone.
They should represent you.
They all look the same—three piece suits and a lot of pictures.
Chapter Two: The endless (or ended too soon) search.
You finally decide on a broker (or a "team" of brokers) to represent you. After a few basic questions like:
How much space do you have now?
Do you think you may grow?
Where do you want to be?
You get into the car, armed with a pile of flyers nicely packaged in a portfolio and a cell phone to call ahead to the landlords or their brokers. You drive around for about five hours, go into four or five buildings, then are asked the big question: “So, which one do you like?”
Chapter Three: Proposals.
With your decision to whip off a proposal to the building of your choice (usually decided after only one five minute walk-through), you’ve notified every building you remotely drove past to “register" your name with the landlord. This ensures that, should you decide not to move forward with your chosen space (or should this deal fall through), you will be obligated to negotiate on your own behalf for just about every building in a fifty mile radius.
Exactly what is in that proposal? Oh, the usual stuff, like:
Your company's name—probably not your full legal name.
The address of the building and the suite number (if applicable).
How many square feet (approximately) the space contains.
When you want to start and how long a term you want.
The base rent.
Now it gets tricky. The proposal may even be creative. Some issues that may be vaguely addressed could include:
Parking costs and number of spaces.
Amount of tenant improvement dollars.
Options expand, renew, cancel, or contract—that last one is real creative.
After a few times around to iron out some details regarding those three or four negotiated deal points, you get a draft of a lease from the landlord, you check a few numbers, and you hand it over for review. The landlord’s just hoping you'll sign it without having a lawyer (or anyone else for that matter) read it.
Chapter Four: "See you in five."
With his work done, the broker can now sit back and collect those commission checks. He did his work. After all, he showed you the space, he negotiated a great deal—he deserves his fee.
Well, yes he does—sort of. Just what did he do to deserve that five or six figure fee that you actually paid?
Before you start thinking “maybe you didn't need the broker” and should have gone straight to the landlord to get a better deal, remember that fee would have gone either in the landlord's pocket or most likely to the landlord's broker. There is no free ride.
What services should you expect to get from your broker?
If you don't expect much, you probably won't get much more than what was covered in Chapters One, Two, and Three of this leasing saga.
Is there more a broker can and should provide? We’ll get to that in other chapters.