The Tenant Representation Process has become increasingly complex and time
consuming requiring multiple steps to deliver the optimal solution in a changing market. Tenants must think strategically
to manage the risks inherent in an office lease transaction and this necessitates reliance upon the unbiased information
and advice of a real estate professional. Basic steps include:
Abstract – Review and summarize key business and legal issues in the existing lease to understand the rights and the
obligations of the parties when setting goals and creating a strategy to achieve those goals.
Invoice Review – Review landlord's invoicing to determine if the billing
is appropriate. Review could uncover improper or erroneous charges but is not intended to serve as an audit. Results
will serve as the basis for a Cost of Occupancy analysis and projection of the existing obligation to determine the impact
that obligation could have upon a new transaction whether a restructure, renewal or relocation.
Financial Analysis & Projection - Create a pre-tax picture of the Cost
of Occupancy and comparison based upon basic rent, electricity, real estate tax and other escalations, commercial occupancy
tax and related costs for properties being considered.
Strategic Planning – Achieve a consensus on objectives and optimal timing to engage the market. Develop schedule
for the Transaction Management Process and begin selection process to create a team of core consultants including architect,
engineer, construction consultant, telecommunications advisor and experienced office leasing attorney.
Financial, Operating and Qualitative Goals - Meet with decision makers to
establish preliminary financial, operating and qualitative goals. Goals are often adjusted as the transaction management progresses.
Market Analysis – Create a market report and analysis
for the target market area that includes offering facts on a range of select properties including vacancies and current asking
rentals. Inspect properties and create a “short list” of viable alternatives.
Tenant – Users of leased property commonly experience changes in needs during the term of a lease;
the need to grow, shrink, reduce the cost of occupancy, alter the layout, to secure an early renewal or relocate to a more
appropriate location. Often tenants assume that they are unable to address these issues because there is a remaining
lease term. However, information and advice of a real estate professional could place such goals within reach. The real
estate professional will strive to deliver flexibility in a new transaction that anticipates changes and manages risks.
A pro–active approach by the tenant is the first step
in the tenant representation process. Seek and secure an experienced, intelligent, energetic and unbiased tenant representative
to advise and assist. Allow ample time to manage the entire process without undue pressue on negotiations and decision