Knowledge Center

Frequently Asked Commercial Real Estate Questions

Click on the following links for important answers to frequently asked questions about commercial real estate brokers, corporate real estate and tenant representation services, the commercial real estate sales & leasing process in Southern California and Voit Commercial Tenant Solutions real estate services:

Why do I need an Exclusive Tenant Representation Broker?

Just as you would hire a CPA to manage your taxes and an attorney to represent you on legal matters, seeking professional advice from a tenant representation broker on commercial real estate matters outside your area of expertise is essential for success. Without exclusive tenant representation you face the risk and uncertainty of navigating the complicated commercial real estate process yourself, expending significant amounts of time and money in the process and the prospect of having to negotiate against the landlord’s broker who is an expert in his field and has a fiduciary duty to represent the best interests of the landlord. Unlike real estate brokers that represent landlords and owners, Voit Commercial Tenant Solutions can avoid conflicts of interest because we specialize in representing commercial real estate tenants and commercial space users. We are 100% accountable and committed to you because we have a fiduciary responsibility as your exclusive tenant representative to represent your best interests. Owners and landlords exclusively engage their own commercial real estate brokers to guarantee the best possible transaction terms and you should too!

Click Here to Discover the Benefits of Exclusive Tenant Representation.

Why Should I sign an Exclusive Representation Agreement with my corporate real estate broker?

As with any professional consultant, Voit Commercial Tenant Solutions works exclusively under written contract with our clients on every commercial real estate brokerage transaction and assigment. Our Exclusive Representation Agreement clearly defines the corporate real estate services we provide and our ethical and fiduciary obligations to the client as their exclusive tenant representative. As such, we are 100% accountable and committed to you because we have a fiduciary responsibility to represent your best interests throughout the real estate process and achieve the most beneficial terms from any transaction. Unlike real estate brokers that represent landlords and owners, we can avoid conflicts of interest by specializing in exclusively representing commercial tenants, buyers and commercial space users. The best way to avoid a potential conflict of interest and ensure your real estate broker is representing your best interests is to execute an agreement acknowledging their fiduciary obligation and duty as your exclusive real estate representative. By doing this, you can also expect a higher level of service, commitment and accountability as the real estate broker knows he will ultimately be rewarded for his efforts. Owners and landlords exclusively engage their own real estate brokers to guarantee the best possible terms and you should too!

Will I get a better deal if there is only one real estate broker (listing broker) in the transaction?

No. This is a very common misunderstanding, often perpetuated by listing brokers seeking to receive the entire landlord's broker's fee. Tenant representation brokers simply share the landlord’s broker's fee, which is already calculated into a property’s cash flow proforma, together with all other leasing/sales costs. The listing agreement provides for the non-negotiable fees to be paid on every commercial real estate transaction whether there is one or two real estate brokers involved, so there is no money to be saved by not hiring your own tenant representation broker. You are actually wasting money by not hiring your own tenant representation broker because you are effectively paying for the privilege of doing so in your lease payments. Not only does Voit Commercial Tenant Solutions typically achieve cost savings several times greater than the full listing fee, but the substantial time and money our services save you during AND after the transaction will ensure you’re gaining maximum value from the listing fee that is paid.

How is Voit Commercial Tenant Solutions compensated?

Every commercial real estate listing agreement compensates the landlord’s/building owner’s broker with a market standard fee, paid when the real estate transaction closes, which is shared with the tenant’s/buyer’s broker if they have one. This incentivizes the owner's broker to find a prospective tenant that isn’t benefiting from their own tenant representation broker because the listing broker then recieves the entire brokerage fee for negotiating against them. Consequently, every commercial tenant is effectively paying for the privilege of having its own tenant representation broker whether they hire one or not. Not only does Voit Commercial Tenant Solutions typically achieve cost savings several times greater than the full listing fee, but the substantial time and money our services save you during AND after the transaction will ensure you’re gaining maximum value from the brokers' listing fee that is paid.

Are conflicts of interest that important?

Absolutely, which is why dual representation is illegal in commercial real estate in most US states. The majority of commercial real estate brokers generate most of their revenue from landlord representation. When a real estate broker signs a listing agreement with a landlord they have a fiduciary responsibility to represent their client's best interests. Therefore, a listing broker representing both sides of a real estate transaction or representing a tenant under the guise of a “tenant representation” broker has a clear conflict of interest and cannot be expected to represent the tenant’s best interests, nor will they have any incentive to manage the tenant improvement or relocation process for the tenant once the real estate transaction has closed. Furthermore, it would be unwise for a listing broker to negotiate in the best interests of a tenant on one of their listings and risk their profitable relationship.

Why do I need a tenant representation broker to renew my lease?

No matter how good you think your relationship is with your landlord, he is in the business of maximizing his profits by getting the most rent possible, period. While you may be convinced you are getting a good deal on your lease renewal this is rarely the case and there’s more than just the rent to think about. Parking charges, operating expense pass throughs and add-ons, security deposits, tenant improvement allowances and endless complicated and misleading lease terms and conditions, with far reaching financial and operational implications, are all up for negotiation. Until you create competition for your tenancy and hire an experienced tenant representation broker, your landlord will consider you a captive tenant willing to pay asking or above-market rents on your lease renewal. When representing you on lease renewals, Voit Commercial Tenant Solutions firstly conducts a thorough review of your lease to determine the options available for reducing your occupancy costs and building flexibility into your lease to achieve your business goals. We then create significant negotiating leverage with your landlord by identifying alternative opportunities in order to secure the most favorable renewal terms possible. We also manage the entire process from start to finish so you don't have to, saving you valuable time and money and exposure to risk while you focus on running your business.

When is the right time to begin looking for new space?

This depends on the size and nature of your commercial real estate requirement. Typically, the best time to start the real estate leasing or buying process is at least 6 months before your lease expiration for requirements under 10,000 SF and up to 12 months or more for requirements over 10,000 SF. While there is no hard and fast rule, a proactive approach is always wise as the real estate leasing or buying process always takes longer than expected. The sooner you start the real estate process, the more time you allow to explore all options and determine your strategy, identify opportunities and alternatives and negotiate the most favorable terms. When landlords know your timing is tight they view you as a “captive tenant” and will usually exploit this weakness by demanding their asking terms and being inflexible when negotiating the lease. The biggest mistake our clients make is starting the real estate process to late. The sooner you start the process and engage a tenant representation broker to manage the process for you, the more time and money you will ultimately save because you will have more time to make the right decisions and negotiate the maximum concessions from your real estate transaction.

Why do I need a tenant representation broker to renegotiate my existing lease when it has several more years to run?

In most circumstances, commercial leases can be renegotiated at any time in order to reduce occupancy costs and restructure the lease to meet your changing business needs. Most tenants do not review their real estate leases after they have been executed and often end up paying more than they bargained for in operating expense pass throughs and add-ons. With corporate real estate typically being a business’s largest expense, second to payroll, it is wise to closely monitor your operating expenses and to investigate the possibility of renegotiating your lease to eliminate these charges and minimize your overhead. Regardless of the remaining term of your lease, we can often find ways to lower your costs immediately and will gladly undertake a complimentary lease audit to advise you on the options available to you for restructuring your lease.

Call us now with any other questions about commercial real estate: (949) 263 5362

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Call: 949.263.5362 | info@voitcts.com