The Role of Brokers in an Office Lease Transaction
The Landlord Agent/Broker
The landlord agent can also be referred to as the listing or leasing agent. Landlord agents represent building owners who want to rent space in their buildings. Most landlord agents have contracts with the building owner to lease either one property or an entire portfolio whenever vacancies arise. A landlord agent responsibility is to look out for the best interest of the property owner.
The leasing market can be extremely competitive, so landlord agents should have a good idea about rental rates for comparable properties in the area. Landlord agents should also know what concessions his client is willing to make to sign a lease. Common concessions include free rent, extra parking spaces, a state-of-the-art security system or a build-out in which the lessee’s space is customized for its needs. An extensive knowledge of ongoing occupancy trends and aggressive marketing tactics help landlord agents lease space quickly.
The Tenant’s Agent
Tenant representatives secure long-term space for individuals and businesses of all sizes. Once a tenant signs a contract with an agent, the agent is responsible for looking out for the best interest of the tenant. A tenant representative must appreciate how much space the tenant needs. Other key considerations a tenant’s agent should also examine are location, parking, pedestrian traffic flow, and the potential for expansion or downsizing are to a client.
Leasing terms, such as the rental rate, leasing period and penalties for ending the lease early must also be discussed, which may involve lawyers and accountants. It is also the agent’s job to find space that meets the tenant’s needs – both the current needs and perceived needs down the road when the lease is still in effect. Tenant agents often work with landlord agents to to ensure that the client is able to move into the space they were promised, in the condition promised, on the day it was promised, per the lease agreement.
How Agents Get Paid
Landlords usually pay all agent commissions. Agents receive one-half of the commission when the lease is signed and the other half when the tenant moves in. Commissions are normally 4% to 6% of the lease’s overall value, which is based on the space’s square footage, the price per square foot, and the duration of the lease. It is not common for a tenant to pay a lease commission directly out of their pocket.
Content is provided by SwiftLease leasing agents.