What is Corporate Services?
Corporate services is a term used to describe services that commercial real estate brokers provide to companies. These services can include: 1) acquiring office or warehouse space through lease or purchase, 2) disposing of excess space through sublease or sale, 3) alternate financing through a sale/leaseback, or 4) consulting. The broker owes his loyalty solely to the company he represents.
Is a Corporate Real Estate Advisor different from a Tenant Rep?
A Corporate Real Estate\ Advisor is a Licensed Real Estate Agent who specializes in representing companies in all their real estate needs. It is basically the same thing as a Tenant Rep, but Corporate Real Estate Advisor is more accurate because companies don’t always lease space and, therefore, are not always tenants. Some companies buy the buildings they occupy. Others need to dispose of excess property through sublease or sale. Still others use an Advisor to help them with a financing tool called a sale/leaseback. The Advisor could also provide consulting services on an hourly or retainer basis instead of acting as a broker when he is paid a commission.
Why do I need a broker?
Sellers and landlords almost always use a broker to represent themselves in a sale or lease negotiation. Buyers and tenants should do the same so they can stay focused on their company while a professional handles the real estate. Tenants will often pay up to 15% less when using a broker than those that negotiate for themselves – especially on renewals. And they often will get other benefits like higher construction allowances and more lease flexibility. The broker’s fee is paid by the seller or landlord anyway so you should certainly get the benefit.
Can’t I negotiate my own lease or building purchase?
Absolutely. But why would you? The commissions are built into the prices and rents so wouldn’t it make sense to get the benefit? In addition, you should spend your time focused on your business. Most business people are experts in their businesses and not in real estate. So remaining focused on their business while having a no-cost commercial real estate expert handle the real estate seems to be a better solution.
Should I have my attorney review the lease?
Definitely. And be sure it is an experienced commercial real estate attorney. Some attorneys are great litigators, but I wouldn’t want them negotiating a lease. Similarly, I wouldn’t want a real estate attorney to represent me in aproduct liability case. Attorneys specialize just like most other businesses so use the one best qualified to handle a purchase or lease.
Who pays REATA?
For leases, the landlord pays REATA. The commission is built into the rental rate that the tenant pays so it is important that the tenant use a tenant rep broker to help them with the negotiation. For purchases, the seller typically pays the commission, but that is not always the case for large commercial deals. Some listing agents are starting to get very aggressive in negotiating their commissions to get the listing. They then can’t afford to share the commission with the buyer’s agent. In those unusual cases, REATA’s commission can be built into the offer price to make it easy.
How far in advance should I start planning a renewal or move?
This depends on the size of the space needed and how specialized the use. Tenants should start working with a broker anywhere from 6 months to 2 years prior to expiration. This allows plenty of time to understand the future of the company, the role that real estate should play in that future, search the market for all options, negotiate the terms of the deal and then document that deal in a lease. But a good broker will stay involved with the tenant over the term of the lease. REATA will help the tenant review landlord correspondence and operating expense bills throughout the lease term to be sure the tenant doesn’t pay more than it should. By doing this, the renewal becomes a part of the process.
Corporate buyers should enlist a broker as early as possible especially if there is a property that needs to be sold before a new property can be purchased. Investor buyers should enlist a broker as soon as he/she decides to invest. The broker can often help guide the investor to the appropriate product type before the investor spends too much time in the search.
Can I use the real estate agent that sold me my house to negotiate my lease or building purchase?
Yes, but given the unique issues that go with commercial real estate, it probably isn’t a good idea. Real estate is highly specialized today much like other industries. You should use the broker best able to accomplish your goals. When buying a house to live in, use a residential agent. When buying or leasing commercial property, use a commercial real estate broker.
How is REATA different?
REATA is different because its founder, Bob Gibbons, represented landlords/owners for 20 years as a property manager, leasing agent, asset manager, construction manager and developer before founding REATA to help tenants and buyers. Who better to represent you than someone who has negotiated on the other side of the table for so long. Mr. Gibbons understands what motivates landlords and owners.