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Commercial Tenant Representation

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Our goal for every commercial client is to find the best possible space with the optimal blend of cost and design. This means attention to a myriad of details, from rental rates to build-outs, flexible lease terms, future options, the costs of improvements needed for occupancy, necessary approvals and timelines. I’m often asked several questions. 

Q: Should I get more space than I actually need?
A: No one really wants to move his or her business. When you’re searching for new space, planning for future growth is critical. It’s better to have an office space that provides flexibility in use than to have an overcrowded one that can negatively impact your employees. The design of your space makes the difference. Your tenant representation broker will ask you the right questions and provide you with valuable insight so mistakes are not made.

Q: Will I save money using a tenant representation broker?
A: The short answer is YES! An experienced broker knows what transactions have been completed at what buildings so they can provide an edge in the negotiations. Whether it’s free rent, a reduced rate, an increased tenant improvement allowance and/or flexibility in the lease term, this valuable insight benefits the tenant. In this market, the landlord has also factored into the listed lease rate the payment of the commission due the tenant’s broker. 

Q:What is the difference in a modified gross lease rate versus a triple net, or NNN?
A: A modified gross lease rate includes the property operating expenses and real estate taxes compared to a triple net lease, which has a base lease rate plus these expenses. A gross lease rate includes the tenant utility and cleaning expenses as well.

Q: What is the process when more than one property meets the tenant’s initial requirements?
A: The tenant representation broker will prepare a request for proposal, or RFP, with all the preferred lease terms and space requirements and send to each preferred property. Upon receipt, a detailed financial analysis will be prepared comparing the properties under consideration. This is so important, as values need to be placed on items for which the landlord has not attached a value. For example, the cost of utilities at each location can be different. It is also important to look at the total cost for each space over the lease term, as escalations and/or graduated rents can make a significant difference over the term. This analysis allows a tenant to make an informed decision.

Q: How do I determine the technology capabilities of an office
A: Fast, reliable internet is critical for today’s businesses. Confirm that there are no cellular dead zones in the building by asking other tenants, and confirm the existing carriers in the building. Check the number of outlets in each room; everyone needs to charge a device at some point.

Q: What are some important location factors to consider when searching for space?
A: The top considerations are convenience for current employees, employee recruitment, access to services and restaurants, travel time to your customer base and future expansion options in the same building or with the same landlord.

Written by: Tracy Metzger

Tracy L. Metzger, President, TL Metzger & Associates, has been active in commercial real estate in the Capital Region for more than 25 years. In early 2000, Tracy opened her own brokerage and consulting business, ranked as one of the top commercial brokerage firms in the Region. She received her paralegal degree from Mount Ida College and BA from State University at Albany. Tracy serves on boards including City of Albany IDA; City of Albany Capital Resource Commission; and Downtown Albany Business Improvement District. She is a member of Capital Region Chamber; Commercial & Industrial RE Board, GCAR; and NYS Association of Realtors.