By Peter Shakalis
This activity required the knowledge of office buildings and their floor layouts (foot prints,) the characteristics of the business districts where they were located, prevailing rental pricing and a working knowledge of the office lease. To a large measure, these functions along with an ability to negotiate the price per square foot and to review the New York Real Estate Board’s boiler plate office lease was the sum of the agent’s role.
Today, we have third party and in-house computerized listing systems that provide agents access to building information and locations as well as available office space units offered by landlords or tenants. As a result finding and showing office space is the easiest part of my work as a real estate agent. Moreover, it is also just the beginning of a much more involved process.
In today’s marketplace, agents must operate as an extension of the client’s own staff; assisting the client’s organization in defining its real estate requirements; to objectively analyze prospective office buildings and space units; review the portions of the lease that impact the operating flexibility of the client’s business; and act as a point person between the various individuals and professional disciplines involved in the process. These individuals often include: architects, furniture & phone vendors, IT consultants, attorneys, landlord agents, construction contractors and the clients own personal.
One of the most important services I perform involves reviewing the landlord’s charges incorporated into the business points and clauses of a lease. The attorney’s efforts are focused primarily on the aspects of the lease that deal with rights and obligations such as; ‘what happens if there is a monetary default’. The business points - the ones that cost tenants money - such as yearly rent escalations (discussed in a prior article); after hour air conditioning costs; the cost of tenant electricity; the loss factors on space (non-existent space that landlords charge for) and other items need to be identified, reviewed and negotiated.
The quality and financial strength of a prospective landlord is also a very important issue. I have suggested to clients on occasion to reconsider otherwise strong space alternatives based upon the weak financial profile of the building and the challenges that they can bring. Just as important is looking over the client’s shoulder to assure that the various disciplines involved in the process are serving the client’s best interests, and not their own.
Ultimately these and other aspects of the relocation process require that brokerage agents provide concise information and independent advice, as well as strong negotiating skills. While the process is not often seamless, good brokerage skills will mitigate the ups and downs and assure as much as possible that there are no surprises financially or otherwise in the later years of the tenant’s occupancy.
Peter Shakalis is a Director at
FirstService Williams Real Estate
pshakalis@fswre.com
It used to be that the commercial real estate brokers’ role was a relatively simple one, assisting their customers in the acquisition of new office space as companies grew or reduced staff.
