Dear Mr. Landlord: We Both Know You'd Rather Deal Directly with the Tenant!
|Q&A on Tenant Representation with a Commercial Landlord
Part Three of a Three Part Post
Most commercial landlords understand the role of tenant representation brokers and welcome the benefits they derive when tenant representation brokers properly educate and advise their tenant clients. However, some landlords, mostly old-school die-hards, continue to maintain very negative views of all things about the tenant representation process. Some actually get offended by the very idea of a tenant representation broker. Offended!? What's that about?
In a recent Q&A conducted via email with a prominent commercial landlord, I had the opportunity to hold a completely frank and open discussion about his views about tenant representation brokers. And, while some of the conversation was challenging at times, both of us came away having learned from each other.
I invited the commercial landlord to provide me with his views on tenant representation, tenant representatives, and how he'd prefer to conduct the business of leasing his properties. The conversation got so good, that it took me three posts to include it all. Be sure to go back and read Parts One and Two! Following is Part Three of that dialogue:
7. Landlord: I wish tenant representative brokers would....
A) Present complete information on ALL tenant requirements at their first communication with me
RealStrat's Response: Do you present all of your requirements at your first communication with tenant representatives? Of course not! While most tenant representatives strive to provide complete information, so that landlords can make informed and intelligent decisions, sometimes complete information is unavailable. In other instances, certain information may be confidential or may change over time as a result of landlord responses, negotiations, or changes in the objectives and needs of tenants. So, providing ALL information at the first communication, while a preferable approach, may not always be possible.
B) Permit landlords and tenants to negotiate directly
RealStrat's Response: Depending on many moving parts, including issues of confidentiality, tenant preferences, landlord's style, and more, permitting direct negotiations may not be beneficial to tenants or to the transaction.
C) Not grandstand
RealStrat's Response: Absolutely! Frankly, no one likes a show off!
D) Make the overall transaction process easier for the landlord
RealStrat's Response: Unfortunately, while no one should intentionally make a transaction unnecessarily challenging, the demands made to the tenant representative by its client may have the unintentional result of creating challenges for the landlord. And, since the tenant representative's job is protect the interests of the tenant, making things easier for the landlord may not be on the tenant's agenda.
E) Communicate thoroughly, more often, and in greater detail
RealStrat's Response: A tenant representative should absolutely communicate effectively to landlords, especially when asking that landlord to be responsive and expend time and resources in an effort to complete a transaction. However, in protecting their tenant's interests, tenant representatives may not be able to communicate in a manner always preferred by landlords.
F) Hurry the hell up! Tenant representatives often take too long and drag out the process. Either make a deal with me or let me move on to a real prospect!
RealStrat's Response: You're certainly right about that! Sometimes, transactions feel like they take forever. But, in many instances, tenant representatives and their tenants must contend with changing business tides and the resulting impact on the tenant's real estate requirements. Additionally, based on how you and other landlords negotiate, the outcome of the transaction, and the tenant's preferences as to where and how it will make a deal, in many cases, is not known until closer to the end of the negotiation process.
G) No longer exist (I had to! Just kidding)
RealStrat's Response: Ha! Ha! Landlords, tenants, and tenant representatives maintain a peculiar set of relationships. Tenants and tenant representatives each have the kind of relationship with landlords that makes them dependent opponents. Even with their bumps and potholes, the relationships work, and they result in profits and success for all involved. As the world changes, so will the roles and relationships of these three parties. Tenant representatives, the direct value they create for their tenant clients, along with the indirect value landlords derive from their presence, will likely be around for a long time.
Mr. Landlord, thanks for being open about your beliefs and your concerns, and for being a good sport about this sensitive topic. I hope that my replies helped you as much as your comments helped me.
Copyright Real Estate Strategies Corporation 2010. All Rights Reserved.
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