This is a team of professionals outside of your organization which guides you along the leasing process. Some of these professionals come into the process along the way, and some remain throughout.
The External Team consists of the Broker and Leasing Agents, Developers (architects, space planners, and contractors), Legal counsel, Bankers or Lenders, Building Management Services. The broker represents you, the tenant, while the leasing agent represents the landlord. Sometimes, a single broker will represent both the tenant and the landlord. This is called a dual agency, and usually requires a disclosure from the broker to all parties. Usually, the broker remains throughout the entire process and helps to coordinate the other members of the external team. The real estate broker is the lynchpin in the partnership between the internal and external teams. Under most circumstances, it is the landlord who compensates the brokers who represent them and the brokers who represent the tenant, even though both brokers represent different parties.
Developers can sometimes be involved with a tenant leasing existing space, since many developers go on to manage office complexes which they have constructed. Or, the tenant works with a developer to be in a new or proposed office building. In most cases, the office space being considered by the tenant will require some amount of alteration, or “fit out,” before it can be ready for that tenant’s specific use. At this point in the process, the broker or the landlord will introduce the architect, interior designer, and space planner. Some landlords have a particular architect whom they prefer for their building. This has the advantage of the architect already being familiar with the building’s features, such as core factor and the location of bearing walls or electrical equipment. In many cases, if it is a small project, the architect will also manage aspects such as space planning and interior design. Many of these circumstances depend on the existing space and the landlord or tenant’s desire for an elaborate fit out.
Oftentimes, legal counsel is considered necessary. While the broker works for the tenant’s best interest, they cannot provide complete legal information. This is true of small negotiations as well as large. Most brokers have an established relationship with a law firm, if their client does not have in-house legal counsel or a preferred firm.
Naturally, discussion of the financial aspect of the lease will arise. Many brokers will be aware of the various municipal, state and federal tax programs and benefits that offer economic stimulus to increase tenancy and the local economic development financing. An example is the current Federal Opportunity Zones that were established to make certain areas more attractive to new growth. These may factor into the potential site selection that was described in previous articles.
The building manager may seem less important in the lease negotiation phase, however, it will play a very important role after occupancy has commenced. As stated before, developers sometimes maintain the management, if not the ownership, of their projects. The building manager usually provides a variety of services related to the building, and will be the chief point of contact after the lease commencement, just as the broker is the chief point of contact before lease commencement. The building manager controls the building, interfacing with tenants, supervising the building’s maintenance and security, collecting the rent, and reporting the financial and physical status of the building to the landlord and owner.
Other professionals who will be helpful to the broker are the movers and utilities companies such as internet providers. In some cases, relocation firms can be employed. These are usually necessary in very large office relocations over large distances.
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WHPounds Commercial Real Estate, LLC is a commercial real estate agency located in Southern New Jersey. Founded and owned by William H. Pounds, II, its Broker-of-Record, the company has assisted in the leasing, purchasing, or sale of over 15 million square feet in Southern New Jersey. As a boutique agency, WHPounds provides a range of services, including asset management under WHPounds CRE Management, LLC.
Disclaimer: The information herein contained is in no way meant to substitute for competent, professional real estate and legal services and/or advice for the commercial or residential real estate market in your area, which may or may not conduct commercial or residential real estate transactions in a way similarly described in this blog series. WHPounds Commercial Real Estate, LLC and/or its agents is/are in no way responsible for poor decisions made or the making of poor decisions, which may or may not be based on the information contained within this blog series. WHPounds Commercial Real Estate LLC and/or its agents strongly recommend the employment of proper, competent, and professional real estate and legal services for the leasing or purchasing of a commercial or residential property.
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