Maybe you’re happy where you are and have a good relationship with your landlord. Or perhaps you consider yourself a good negotiator. Should you still use a broker? Yes.
The “golden rule” of real estate negotiation is: Time + Options = Leverage.
Unless you have unlimited time and a knowledge of all opportunities in the market, you’re likely to leave money and flexibility on the table.
In order to maximize your time and money, here are our top ten reasons to hire a broker. Note: it is important to not use just any broker, but a tenant representation specialist at a major commercial real estate firm with plentiful resources and a large geographic reach.
1. You have nothing to lose, and everything to gain
It costs you nothing to hire a broker. The fee your tenant representation broker receives is paid by the landlord, split with their broker and has already been budgeted into the landlord’s rent structure. According to JLL research, a good broker will save an average of five times the cost of their fee.
2. Brokers are better at this than non-brokers
Chances are, you only study and evaluate options in the market every three, five or ten years—whenever your lease is about to expire. Brokers are immersed in the market all day, every day. This real-time knowledge of the market can change daily, so why not leverage this information for your benefit?
3. Brokers have access to better information
A firm like JLL has full-time employees dedicated to studying different markets and the way they behave and react. Even if you are not considering moving, this “ammunition” increases your leverage in negotiating with your own landlord.
4. Brokers save you time
You have a company to run and day-to-day responsibilities that are not real estate-related. Engaging a broker enables you to eliminate non-productive time and focus further on your company’s profitable growth.
5. Your process shifts from reactive to proactive
Establishing a relationship with a broker—specifically, with one interested in your long-term success—can elevate your process from a reactive one to a proactive model that anticipates opportunities and meets the changing needs of your company.
6. Not using a broker tips your hand to the landlord
Renewal transactions are the most profitable transactions for landlords. By not hiring a broker, you are effectively telling your landlord you have no intention of moving. No matter how strong your relationship with your landlord is, they are in the business of making money off their real estate investment. Having a broker will ensure that you still get the benefit of a strong deal that favors you and your business.
7. Using a broker reflects the good business practice of outsourcing for non-core services
Similar to an accountant or attorney, a commercial real estate broker is a specialized expert and should be viewed as such. Real estate is typically the second or third largest expense for a company, and outsourcing to an expert is a sound business practice.
8. If you have leases in multiple cities, a major brokerage firm gives you one-stop service for all locations
Partnering with a strong brokerage firm that operates in multiple markets provides you with a single point of contact and ensures a streamlined process across all transactions in all markets.
9. Large brokerage firms accumulate and share the benefits of experience
Regardless of the size and scope of your company’s individual real estate needs, finding a new place greatly affects you and your business. A major brokerage firm can transfer collective insights and lessons learned into positive practices that can be leveraged for your benefit.
10. A broad-based brokerage firm is more capable for specialized needs
Perhaps you wish to investigate special opportunities such as build-to-suit facilities, environmentally-friendly properties, or footprints that facilitate alternative work arrangements. A large, full-service brokerage firm is most likely to be knowledgeable and experienced across the broadest range of specialized leases and properties, even to the extent of having staff who focus on particular areas.
The best brokers are part of a wide-ranging firm that provides multi-faceted real estate services to clients. Such complementary services might include lease administration to help you prevent overpayment through oversights or inaccuracies, and project management to help build out a leased space to suit your needs best.
There are many reasons to use a broker to manage your real estate transactions. Consider these top ten when thinking about your next office move.