You've made a great business decision and decided to engage Exclusive Tenant Representation to help you in your company’s real estate needs. Are you familiar with what to look for and what you can expect from your broker? The following are keys items to be aware of when selecting a broker and their team should they have one.
Strong market knowledge
In addition to providing you with quarterly reports on the overall market, your broker should have their finger on the pulse of the local office market. A sophisticated, experienced broker will have the ability to successfully leverage their relationship with landlord brokers to know all current listings, rates of both market and off market properties. A broker should have a deep, intricate understanding of their entire market, enabling them to offer you the most thorough survey and negotiate the best possible deal. A broker with a long, successful standing within the brokerage community will also be aware of any spaces coming to the market due to expirations, which may be ideal for your business. Landlords favor a deal presented by a knowledgeable broker with whom they know will negotiate based off strong market knowledge and has the capabilities to bring the deal over the finish line. Keeping current on build-out costs, employment rates and working closely with economic development groups are all things you should expect your broker to be involved in.
Strong Communication Skills
One of the most common things our team hears from our tenants is how disappointed they were with their previous representative’s response time and what they felt was a lack of care and or a sense of urgency. Your broker will handle numerous activities from detailed surveys, booking of tours, negotiations on proposals for all identified properties, lease review and countless other important detail oriented tasks. Establishing your expectations from the very start is a key way to ensure you meet deadlines, stay in front of the landlord’s broker, and don’t lose an opportunity. As the Las Vegas market continues to tighten, the adage “time kills deals” has never been so true. Your broker sitting on a counter proposal from the landlord’s broker, not responding to any follow up requests, or having a slow response time in general could give any competing tenants the advantage needed with the landlord, ultimately ending with you losing the space.
The Proper Bandwidth
As we touched on above, your broker will have their hands in numerous buckets in the interest of your company’s real estate needs. A lot of brokers take the “lone wolf” approach, which can offer benefits, however, when dealing with more than one client it is often unrealistic to assume that a single broker can effectively navigate the entire deal from start to finish as efficiently and timely as a team can deliver. Another option is a broker that leads a team, allowing them to not only keep the deal process flowing but even stay ahead of any and all processes. A team with more than one Exclusive Tenant Representative and additional staff is the ideal structure when overseeing large national clients and local clients. Combine a four-person team with the backing of a Global Commercial Real Estate Firm and that can be the ultimate recipe for at or below market deals, preferable deal terms and the vast amount of resources needed. There is no “I will get to it later”, “I didn’t have the time” or any other completely reasonable excuse for a single operator you may hear when engaging a sole broker. Delays and an inability to perform the needed steps can be detrimental to your business’s launch within the Market.
Exclusive means Exclusive
It is important to confirm your broker is indeed exclusively representing tenants within the market. The Broker will not have ANY listings, other than those that are being subleased by their tenants, meaning there are no loyalties that must be honored or incentives for negotiating on any particular buildings. The end game for your broker should they be exclusive is to get you the best possible rate and deal terms your business requires. Each tenant’s requirement is unique and having representation with only your interests in mind is the key piece to the puzzle. This would also be a good time to touch on specialties. Your broker should not specialize in any other facets of real estate other than commercial real estate. Would you contract a handy man for a home remodel or a company that specializes in home remodels? We would all choose the contracting company, which comes with the promise of knowledge, deep resources and the protection needed when signing anything that involves a contract.
Remaining cognizant of the above when engaging help with your real estate needs can be the difference between simply finding a space that will do, and creating an environment you, your company and your employees can feel comfortable in, and the flow of work can be at optimal levels. Keep this in mind and you’re sure to find the perfect broker for your company, should you require further information or are in a different market feel free to call our team and we can connect you with the market leader in your city.
Team Palmeri – Wainwright specialize in exclusively representing office users within the Las Vegas Market. Blog written by Natalie Wainwright.
During the great recession, of all the commercial real estate sectors, none were affected greater than the office market. For a company the two biggest cuts to the bottom line during the downturn were in space needs and staffing. The need to survive by going lean provided companies the opportunity to reassess their ability to provide services with less overhead than previously believed.
As the market has recovered, we have not experienced the same pre-recession organic growth within the traditional sectors of legal, finance and professional users. The majority of businesses continue to be very cautious as it pertains to taking on too much space for too long of a term without the appropriate flexibilities to adapt quickly to the ever-changing economy.
What has transpired is a new outlook on how the office space is utilized to build collaboration, efficiency and productivity. These new trends have spawned from the massive growth within the tech industry and the success in the open plan workplace. With senior employees and executives giving up their private offices work side-by-side with their colleagues, pressures are now being put on the traditional sectors to incorporate many of the same trends to attract the new millennial work-force.
Depending on the industry, there is a fine-line of how much you veer from the traditional layout. Law firms and financial companies still maintain the private office concept, however we are seeing a massive shift to same-size offices for the senior partners to the new hire, as well as full glass offices to incorporate natural light and collaboration and café style break rooms.
How does this affect your tenancy, particularly in Las Vegas? With Las Vegas historically 12-24 months behind the national trends in office space design, we are quickly catching up. The difference between Las Vegas and the major markets seeing these changes are:
· Minimal New Development – With the lack of new office development in Las Vegas (The Gramercy Phase II, only active office development), we are seeing tenants build-out the open plan workplace in buildings that were not designed for these layouts.
· Restrooms – With companies using less space, but not decreasing employees, existing buildings were built to a code based off a certain amount of private offices vs. open work space. This original design dictated how many restrooms were required in a building. With companies using 20-40% less space, this leaves the landlord the ability to lease additional space in the building, which equates to more people using the facilities. Landlords may have to start incorporating additional restrooms to accommodate these new open plan.
· Parking – Much like the restroom concern, parking is just as much, if not more of an issue and concern. With the market recovering, and landlords leasing up their buildings, what used to be an oversight when it comes to parking allocation, is being taken much more seriously. With the new open plan concepts, the existing inventory was not designed to accommodate the new parking ratios of 6-10 per 1,000 square feet of leased space. With traditional parking ratios of 3.5-5 per 1,000, landlords are either going to have to buy additional land, build a parking structure, leave space unoccupied in the building to accommodate the tenant’s high ratio, or focus on tenants that don’t require todays parking needs.
· Live-Work-Play – Unlike many of the traditional cities across the United States, Las Vegas is lacking Live-Work-Play options. With the majority of development happening in the suburban market, having an urban environment that provides a true live-work-play lifestyle in Las Vegas isn’t in the cards for the foreseeable future.
When exploring your office space needs, be sure to understand your needs today versus those same needs in 3-5 years from now, and how todays trends are going to affect your tenancy for the entire lease term. Having a complete and comprehensive strategy to align your facility needs with your business objectives will help overcome unforeseen obstacles down the road.
Your Lease is Expiring! Do you know your options? Do you have enough time to achieve your space needs? Do you know where to start?
Our team receives calls on a daily basis from Tenants in a panic. Their lease either expires in 1-6 months or they need space in 2-4 weeks. Leasing office space is a complex timely process with significant financial commitments to be considered by the Tenant.
The number one rule when it comes to leasing is to Start Early! Whether you plan on renewing, relocating or are looking for new space, it is important to allow enough time to evaluate your current situation, your projected future needs, assess the options in the marketplace and have the leverage you need to negotiate a favorable lease.
I want to renew my lease:
If you plan on renewing, the ability to execute a transaction in a shorter period is easily achievable. However, by doing so your current Landlord can make the assumption you do not plan on relocating. This gives the Landlord the leverage they need to keep you as a Tenant at less favorable terms than could have otherwise been achieved. Landlords know that Tenants will renew 70% of the time, as they understand the disruptions associated with an office relocation. In order to achieve the best renewal terms possible, you have to put your Landlord in a competitive environment, forcing them to get aggressive to retain your tenancy. Landlords understand the leasing process and the time needed to complete a transaction. By utilizing a Tenant Representation broker and implementing the proper timing to address a renewal, the Landlord realizes you are being informed about the current market conditions, the alternative options and they take your potential relocation much more seriously.
I want to relocate:
What do you need to consider when looking at a relocation? First you should establish an internal committee led by a senior employee and supported by the key decision-makers and department leaders (IT, Human Resources, office manager, etc.). Your Tenant Representation broker should have a single point of contact within this committee to keep the process simple.
The committee should work together to determine the following key components when considering new space.
When should I start?
Depending on the size of your organization and current market conditions, you should start the process of evaluating your office needs 18-24 months ahead of your current lease expiration. If you are a larger organization, we recommend 24-60 months of lead time.
By starting the process early, the burden of an upcoming lease expiration is eliminated, allowing employees to focus on business operations. The more time you have to negotiate results in better leasing terms whether it’s a renewal or relocation.
Where do I start?
By utilizing a Tenant Representation broker, the process becomes much more fluid and efficient. Our team handles lease negotiations on a daily basis, while a Tenant’s need to focus on their lease once every 3-10 years. Ensure your Tenant Representative is well qualified and has the technical skill, market knowledge and experience that your organization deserves. A Tenant Representative knows how to listen effectively to their client’s needs to ensure they are delivering and focusing on the important issues.
During this process, your Representative will familiarize you with the local office market conditions and review your existing lease commitments. By knowing the market vacancies, supply projections, current rental rates and tenant concessions, you will be in the position of leverage to best negotiate your next lease.
Cushman & Wakefield | Commerce can provide you with the Representation services needed to assist your company with your facility needs now and in the future.
Contact our team to discuss your specific office needs and the current opportunities in the Las Vegas market.