In order for a tenant rep broker to find the right space for your business, you will need to provide some information. The purpose of providing this information is so your commercial real estate representative can have a full understanding of your needs, requirements, as well as your wish list of amenities. Your broker won’t need much information starting off but you will know if your broker is worth his or her salt if they ask you the following questions:
1) What is your legal company name?
If your broker never takes the time to find out whether you are a sole proprietor, a member of a partnership, or if you are a DBA (an entity “Doing Business As”), then you have no business dealing with that broker. A broker who doesn’t ask the right questions at the forefront either doesn’t care about your well-being or simply isn’t versed enough in the art of Commercial Real Estate to provide you any real or valuable assistance.
2) How long have you been in business?
It is important to know whether your business is a Fortune 500 company, a Ma and Pa shop, or somewhere in between. Based upon that knowledge, a Tenant Rep Broker can best determine the most advantageous strategy to present you to the Landlord as well as the best way to negotiate the best terms for you. If you are a long-standing business, you may be able to get more favorable terms than a start-up company because you can demonstrate consistency and stability. A start-up company (if you are in business less than two years) will be looked upon as a risk in a Landlord’s eyes. In that case, you must rely upon your broker to position you in a way that makes you look like an A-class tenant!
3) Can you provide 2 years of financial statements?
It is important for your broker to be able to show the landlord that you will be a stable and reliable tenant. All the landlord wants is for their clients to be able to afford their payments and to pay on time. If your broker can demonstrate that you are that kind of tenant, you should be able to get any commercial space within your budget.
4) How soon are you looking to move?
Your timeline constraints will let your broker know how fast they need to move for you. Sometimes the landlord’s broker can be slow to respond. If you inform your broker that you have a deadline that you must meet, he or she will put pressure on the landlord’s broker in an effort to expedite the process.
5) How much square footage do you need?
The amount of square footage you need will ultimately determine how much you pay monthly for your commercial space. Your lease rate is calculated by price per square foot. If you are unsure of how much square footage you need, share the number of employees you have with your broker. He or she will be able to calculate a rough estimate of how much square footage you need based upon the standard requirements of how much square footage a single employee needs to work effectively and comfortably in a work space.
6) How much do you want to pay monthly?
Be sure to tell your broker how much money you are looking to spend on your monthly rent. Based upon your requirements, your broker will search the market extensively to find a location that fits your financial comfort level.
7) How long do you want your lease term to be?
Some commercial leases can be for as little as 1 year while others can last for as long as 30 years…or even 99 years! When you are a small business, you may be looking to do either a 3, 5, or 7 year lease to get started. While you can choose the lease term that makes the most sense for your business, it would be most advantageous to take advantage of a minimum of a 5 year lease. The reason being is that it creates leverage. If you are willing to negotiate a 5 year lease or more, the landlord is more likely to take you serious and would be more open to offering you more in concessions such as tenant improvements (TI) and free rent. If you are not willing to sign a 5 year lease, negotiating for optimal terms will be much more difficult for your broker.
8) How many people occupy your facility at any given time?
Providing this information to your broker will allow them the ability to negotiate the right amount of parking spaces needed for you to run your business. Additionally, this information is helpful to know to avoid any code violations.
9) What area of town are you looking to lease in?
Telling your broker the side of town you are interested in leasing in is extremely important and can completely affect your bottom line. For example, here in downtown Atlanta, the average rent ranges from $12-$24 psf (per square foot) depending on the building class. In Buckhead, the average rent ranges from $24-$40 psf. Your geographic area makes a huge impact on your budget. A well-versed broker can assist you with understanding the current market trends.
10) What works and doesn’t work in your current space?
Your broker needs to know what you love about your space as well as what you don’t like about it. Give your broker a broad understanding of what it is like to work in your shoes everyday, and your broker should be able to find what you need and want in a commercial space based upon the picture you paint.
11) Does your business operate after hours and on weekends?
Some buildings and centers do not offer air conditioning or on-site security during off-hours, for example. If they do, you may be charged an additional fee per hour for the time that you use your commercial space outside of normal operating hours. Make sure your broker understands your needs and provides you a clear understanding of how the landlord operates the building so you don’t end up with unexpected expenses.
12) What is your final decision making process and who are the decision makers?
Your broker needs to be aware of who’s who in the transaction. If there are more than one decision-makers, the broker must know who needs to be aware of any changes in the deal. This will keep all parties who are instrumental in the transaction informed on the process as things move along.