Lookin’ for Tenants in All the Wrong Places

The Destination

It has been 18 months since we launched our pilot program for Tenant Rep Brokers and I’m thrilled to say that it has been an overwhelming success!  In fact, since we launched, others have tried to copy our model which is further validation of the market opportunity.  However, their captive audience isn’t necessarily tenants that are searching for space and is reflected in the quality of those leads.

2012 and 2013 were record years for us over multiple metrics and 2014 seems to be on the same overall trajectory, if not better:OfficeSpaceUserGrowthOfficeSpace.com continues to be the premier destination for tenants that are actively looking for space.

The Program

Tenant Connect is our broker marketing program specifically designed for tenant representation brokers from the ground up.  Our platform allows prospective tenants to reach out to our Tenant Connect Brokers directly as they are searching for available spaces while on OfficeSpace.com.  These inquiries or contacts can happen via email or phone and are tracked in our system and relayed directly to the broker.  It is truly a platform that works for both the Tenant and the Tenant Reps.  Best of all, as a tenant rep, you don’t have to do anything to source the clients, you just have to qualify and respond to the inquiries…something you all do currently.

Overall results for the past 18 months:

  • Approximately $500,000 in commission revenue generated for the broker
  • Over 6,500 contacts directly delivered to the broker
  • Over 115 closings with a large pipeline
  • Our broker churn rate is flat at 0%, everyone is seeing the value

The Journey

All our current tenant connect brokers are reaping the benefits of adopting early as they are all generating commissions and have secured their spot in their respective markets.  All our pilot cities are currently full but we are always building out wait lists.  Additionally, we make proactive changes to our tenant connect broker pools based on performance and user reviews, which helps us improve our tenant experience.

What some of our Tenant Connect Brokers have to say:

Overall – the use of OfficeSpace.com has enhanced my ability as a broker tenfold – I truly cannot imagine getting going without a tool like this.  My interest in inbound leads and how to qualify, nurture and then cultivate them has proven a great asset to Colliers –and an invaluable learning experience with your tool.  I look forward to many more years of successful partnership – and would encourage any and all feedback you have for me in the future. — Sam Devorris (Colliers, Denver)

(in 4 months) Have received over $30,000 in commissions my efforts have generated from the leads so obviously it has worked for me! — Scott Driver (Scott Driver & Company, Seattle)

The main reason for enjoying the TC Broker Program over the last two years is the ease of quality inbound leads and income, not just the immediate 5 figure deals but the future 5/6 figure deals when leases roll/renew/relocate.  I have never done a six-figure lease with Office Space yet, but in 2013 and 2014 so many deals were in the five-figure range. I also have a 62 month deal in the highest priced building in all of San Diego County today from an Office Space lead – anyone can call me about it, and I will note how easy it was to get.

In our competitive commercial real estate environment to have so many office leads come in that are coming from areas that you would otherwise have to be LinkedIn, be introduced, or network to meet the President or CEO, OfficeSpace.com is able to cut right to the front of the line.  

I recommend OfficeSpace.com to all tenant reps, the only problem is not all tenant reps can become a member, so I tell them in minutes to sign up or get back to LinkedIn, be introduced, or network. — Michael Mazzotta (XREIT, San Diego)

The Opportunity

We’ve learned over the past few years how to attract and keep prospective users on the site and we will continue to listen, learn, and refine our services.  The team at OfficeSpace.com is aggressively expanding our listing base throughout the nation and this will allow us to bring this platform to many more markets in the near future.

If you are interested in being a leader with entrepreneurial foresight, contact us for more information and reserve your spot as we offer this platform in your market:

Don’t miss out like so many brokers in our pilot markets did, by letting the herd mentality take over.  Many of those that missed out was simply due to waiting to see who would join the program.

After all, where else can you tap into a steady profitable stream of prospective tenants actively looking for your help?

Where are you looking to find tenants?

5 Keys in Negotiating an Office Lease

You don’t get what you deserve. You get what you negotiate. This especially holds true in the world of real estate.

While the process of negotiating a commercial lease can be stressful for most business owners or decision makers, keeping these five factors in mind can ensure that you avoid some of the most common mistakes made by entrepreneurs:

1. Find leverage.

Regardless of whether it’s a landlord’s market or a tenants’ market, there’s always something that can be used for leverage.

One of the most important ways to create leverage is by use of time. Most leases take months to complete so avoid procrastinating when it comes to the office search. Don’t let a lack of time decide the lease terms.

Create leverage by keeping mum about feelings about the  space, especially to the listing broker or landlord. This will allow the broker to do a better job negotiating.

If the other party recognizes a desire for the space and that a prospective tenant can’t select anywhere else, the other side just received some leverage. It’s always a good idea to have alternative space options at hand.

According to Jason Bollhoefner, vice president at Corum Real Estate Group in Denver, “Always have a solid back-up option at hand, especially in an improving real estate market. Being prepared to walk away is a very powerful aspect of successful negotiation.”

2. Don’t think rates. Think term.

Tenants often become caught up in rates upon finding a space. While the rental rate is important, especially the gross rate, the term of the lease can have a more significant impact on finances.

Instead of worrying about bargaining for a few percentage points off the rate, spend time negotiating the term and thinking about the company’s true needs for the future. If the wrong term is selected, the tenant will likely end up paying more in rent for a space that doesn’t work for the company than what was saved by paring 5 percent from the asking rental rate.

3. It’s never true that a tenant gets anything free.

The length of the lease’s term also affects other key variables such as tenant improvements and concessions such as rent abatement. This goes both ways. Don’t lock into a term for the lease that’s years longer than initially desired just for free rent or better tenant improvement dollars. Such improvements are never free. Tenants need to understand that these costs are always baked into the lease’s value by the landlord. The landlord makes the money back at some point.

4. Arrange for a a solid legal review.

Keep in mind that a broker is not a lawyer and that brokers are paid on commission. Their commission increases based on the value of a lease. While brokers are experienced in lease negotiations, they do benefit from a tenant’s signing a lease and typically receive nothing if no lease is signed.

This structure, unfortunately, creates some conflicts. Paying an experienced real estate lawyer to review the lease should be a part of the negotiation process. The lawyer is paid regardless of the space chosen or even if the rental is postponed or a potential tenant walks away.

5. Negotiate protections for an exit.

Negotiate some protections for exits should things go wrong in the future. If a tenant feels it has good visibility for the next two years but not five, try to negotiate for some cancelation clauses keeping that in mind.

Finally, don’t forget to negotiate the lease. Unlike some things in life, the tenant does win from negotiating. Be creative to get needs met.

To learn more about the commercial real estate process, visit our FAQ.

This article was written by Susie Algard and  originally featured on Entrepreneur.com. See original source here: http://www.entrepreneur.com/article/237113