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.
Landlords and brokers have been forever locked in a battle over the amount and timing of landlord paid compensation, when landlords are unsure of the quality and stability of particular tenants. Landlords contend that because brokers bring tenants to landlords, that those brokers should be responsible for their tenants' creditworthiness and should participate in the credit and other risks borne by landlords.
Considering the current challenges in the global economy and the commercial real estate marketplace, it is amazing that a few brokers, continue to take a laid-back and nonchalant attitude toward their business, their clients, and their potential customers. While this type of attitude may exist across all segments of the commercial real estate industry, and other industries for that matter, I have most recently experienced this with a handful of landlord representatives.
The role of a tenant advisor is to determine the optimal achievable transaction structure on the tenant's behalf, advise the tenant as to how it can achieve those terms, and to execute its tenant's preferred transactions.
Traditional real estate commissions, based on a percentage of rental income or sale value of a transaction, work very well when brokers represent landlords, sublandlords, and sellers.