The best circumstance to find a space without retaining the services of a tenant rep broker is when you are looking for a small space and/or short-term lease. Generally, since the total lease consideration is small, the commission that will be paid is even smaller. It is hard to find a good broker that is willing to work for a small commission. Remember, it takes the broker just as much time to help you lease 5,000 square feet for five years as it does to lease 1,000 square feet for three years. In addition, the listing agent will usually work harder to lease a small space if the commission does not have to be split.
If, on the other hand, you’re looking for a larger space or a longer lease, it’s usually advisable to call upon the help of a tenant representation broker. They’ll help walk you through the process and negotiate on your behalf. The commission of the tenant rep is paid for by the owner, so there’s little incentive for tenants to go without one. In some cases, listing agents can encourage tenants to forego their tenant rep in exchange for a lower commission. As noted earlier, this may be advisable for smaller deals; however the complexities of more substantial projects warrant the need for a tenant rep broker.
Doing your own research can pay off, whether you’re looking for a small space or a large one. Learning the local market and checking out the inventory is an important part of being an informed tenant and business owner. Listing services like OfficeSpace.com can help those looking for a new business location to understand the market and refine their own needs, as well as start the leasing process when the right space is found. Tenant rep brokers will appreciate that you have thought about the requirements your business has and what a suitable space would look like.
If you choose to use a listing agent as your own broker, be advised that their primary duty is to serve the landlord. This does not mean that mutually beneficial arrangements cannot be made, especially with smaller properties, but it’s often in the best interests of the tenant to use a tenant rep broker. Since landlords have a professional advocate on their side, tenants can be similarly empowered by using a tenant rep. Still, every situation is different and business owners have to ultimately decide for themselves.