10 Reasons to Hire a Commercial Real Estate Broker

Most people understand that buying a house often requires help from a real estate professional with inside knowledge of the market. But when it comes to leasing a commercial space, many surprisingly go it alone.

Professional brokerage when finding a place for your business to grow is as important as it is when purchasing a home - if not more so. A commercial real estate broker dedicated to the tenant - often called a tenant representative - could influence the outlook of your business for years.

A broker who knows the type of commercial space you are looking to rent and what to keep an eye on in the lease will save you time and money in the long run. Establishing your team before you start the process will help ensure the best results.

Here are 10 reasons to hire a commercial real estate broker (or tenant representative) to help you find a space to lease.

Tenant Brokers Represent You

When you call the number found on the ad for a commercial building, you'll be connected to a commercial real estate broker who is legally representing the landlord. This means that even if they represent you as well, they have the landlord's best interests at heart.

If you truly want a commercial real estate broker who is looking out for you and your business's interests, search for one yourself, and hire one that is looking out for you.

Brokers Have Knowledge of the Commercial Real Estate Market

Commercial real estate is vastly different than residential real estate. The needs of the buyer or lessee vary quite a bit between different markets. While a person might look for a home with a view, or one that's near their work, an entrepreneur might be looking for a location that provides the most foot traffic or the best parking, for example.

Commercial real estate brokers keep an eye on the market and know where to find the best applicable spots at the deals. They also have insider knowledge about deals that haven't yet made it to the market.

A Rep Has Access to Other Commercial Listings

In residential real estate, the MLS allows every agent in the region to search a comprehensive database of homes listed.

The commercial space doesn't have a single, central listing platform. But the right agent can provide you access to an entire array of proprietary databases and commercial listings.

CRE Brokers Have Access to a Targeted Network

Those who regularly deal in commercial real estate investing know each other. Because they develop professional relationships with one another, you have access to not only their immediate knowledge, but their professional network as well.

Have a question about a certain office space you heard might go up for rent? Your broker can find out. That network can also be the means of brokering you an even better deal, just by association.

Reps Can Save You Time

Sure, you could go looking through Google or your local newspaper for commercial real estate. You could also set up a time to walk through each location, pretending to know what to look for. Or you could go to an expert.

In business, you want to monetize your available time, not waste it on things outside your expertise. Don't squander your valuable time looking for a commercial space on your own. An experienced commercial real estate broker can do the legwork and locate good potential properties in much less time.

They Can Also Save You Money

One of the biggest misconceptions holding business owners back from using a commercial real estate broker is the amount of money they believe it will cost them. In reality, though, the landlord typically earmarks a percentage of worth of the deal specifically for their broker and the lessee's broker.

Additionally, using a commercial real estate broker also means you've got an expert negotiator at your disposal, who can save you money on your lease. They know what to ask for and when to ask for it, which is a talent mastered over years of experience in the field.

Brokers Take Emotion Out of the Deal

You're passionate about your business, so emotion in decision-making processes is normal. When negotiating for space and terms, you have a lot at stake. Landlords can sense uncertainty, though, and many use it to drive up prices.

Commercial real estate brokers neutralize that emotional aspect. They are able to calmly and rationally discuss your options without showing your hand to the landlord.

A Professional Can Gain Insight Into a Property's Past Life

Is the daycare you're looking to rent a former adult entertainment store? A rental's history often gives it a reputation, and haunts anyone who rents the building later.

Your broker should have a way of figuring out (if they don't know already) the history of the building you are looking to rent. Make sure you are comfortable with the association it brings to your business before signing a lease. You don't want the public to avoid your company simply because of who the previous tenant was, for instance.

Brokers Can Help Get You Favorable Lease Terms

No two commercial real estate deals are the same. But a competent agent will ask you questions about your trade cycle and other aspects of your business that could be affected by negotiable terms in a proposed lease. An agent will also ask questions that help you obtain lease terms that are favorable to your business. Most attorneys do not do this.

A great commercial real estate broker will also refer your business to another type of specialist if they lack the expertise in the areas where you need the most help.

Tenant Reps Can Counsel You Even After The Lease is Signed

Brokers aren't legally required to maintain a connection with a lessee after the lease is signed, but many do.

Tenant reps will often stay tuned to the next steps in the process to ensure your tenant improvement allowance and build-out provisions are met and that you're happy with your space. If you're not, they'll of course want to help make

Actionable Steps

1. Determine your business's specific needs for commercial space.
2. Research and interview potential tenant representative brokers in your area.
3. Choose a broker with experience in your desired property type and location.
4. Clearly communicate your budget, timeline, and requirements to your chosen broker.
5. Work closely with your broker throughout the search and negotiation process.
6. Review all lease terms carefully with your broker before signing.

Now that you understand the benefits of working with a commercial real estate broker, it's time to take action. Start by browsing available commercial properties for lease to get an idea of what's on the market. Then, reach out to a qualified tenant representative to help you navigate the leasing process and secure the best possible deal for your business.

About the Author: Steven R. Goldstein

Steve heads the ChicagoBroker.com team at Jameson Commercial and has specialized in office tenant representation since 1991.

This article was updated on 12/13/2024