Tenant Representation: What It Is and Why You Need It

As a result dependent company, albeit a retailer who wants back-end distribution warehousing or a manufacturer with a need for product improvement facilities, the demand for some industrial space is inevitable in these and other similar types of business operations. In my many years (since 1993) of being included in real estate and having served for many corporate entities, I have found that with the elimination of colossal organizations, which designate a specific budget to work their in-house corporate real estate departments, it has been my experience that the task of searching, analyzing and negotiating industrial space leases is usually inherited by most company's CFO's. Apparently, the CFO at any organization must be involved in the decision-making a process of negotiating and executing lease agreements for their firms, however, more often than expected, the CFO's time is obliterated in pre-screening prospective sites and managing many contract proposals from landlords and their real estate representatives. Most, if not all, management executives will acknowledge that they, including CFO's, will have to allocate some time and effort to the process of selecting industrial space. However, they will also agree that their daily operational tasks to maintain profitability should not be sacrificed. With the understanding that industrial property dependent organizations have very specific space and location requirements, and that the amount of time and effort required in searching, pre-screening and managing a lease transaction can be quite lengthy and meticulous, this provides a perfect opportunity to demonstrate the value of working with an experienced Tenant Representative. 

Let's evaluate a simple example of the scenario that most CFO's will be faced with when selecting industrial properties for their firms. It will most likely begin with an internet search using keywords like "warehouse for lease," "warehouse for rent," "refrigerated storage facilities," and "industrial for lease," however very rarely will the search term "tenant representation" or "tenant representative" be used. The results will probably lead to commercial real estate companies who provide landlord representation services and have an inventory of the industrial property, in which they are attempting to market and lease on behalf of their clients. Although most of these landlord reps (i.e. real estate agents and brokers) will listen to the CFO's needs and requirements, they will first attempt to peddle any of the properties within their inventory and should none be of interest, then they will try to search the market and present random properties in the hopes of executing a transaction as quickly s possible. The CFO should understand that unless they are working with a bonafide Tenant Representative, these listing brokers will always have the landlords' interest in mind rather than the CFO and their organization as a tenant.

It is always imperative to work with a tenant representative that specialize in the type of real property being searched for. Therefore industrial space tenants should seek out and collaborate with an industrial real estate services firm that provides tenant representation services, and there are numerous reasons for this. First and foremost technical housing tenant representatives understand industrial properties and how they function. Secondly, industrial tenant reps understand the modern tenant mindset and the intricacies that must be addressed, including proximity to transportation hubs, electrical paneling loads, and clear space mandates, etc. Lastly, an experienced tenant representative will provide market analysis, similar lease reports and have the ability to understand which points should be aggressively negotiated to maximize the tenants' lease value.