The Tenant Representation Process has become increasingly
complex and time consuming requiring multiple steps to deliver the optimal solution in the ever 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 follow:
Lease Abstract – Review and summarize burdens and benefits of the existing
lease. Critical 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 & Cost of Occupancy Projection - Create
a pre-tax analysis of the Cost of Occupancy with comparison based upon basic rent, electricity, real estate tax and other
escalations, commercial occupancy tax and other 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, project manager, telecommunications advisor and experienced
office leasing attorney.
and Qualitative Goals - Meet with decision makers to establish preliminary financial, operating and qualitative goals
and to make decisions as necessary. Goals are often adjusted as the transaction management progresses.
Market Analysis – Create a market report for the target
market area including the offering facts on a range of select properties. Conduct inspection of properties and create a “short
list” of viable alternatives.
The Pro-Active Tenant – Users of leased property commonly experience
changes in needs over the term of a lease; the need to expand, contract, reduce the cost of occupancy, alter the layout,
secure early renewal or termination. Tenants sometimes mistakenly assume that they are unable to address such issues because
there is a remaining lease term. However, the advice of a real estate professional could place such goals within
reach. The dedicated tenant representative will strive to deliver flexibility in a new transaction that anticipates changes
and manages risks.
approach by the tenant is the first step in the tenant representation process. Seek and secure an experienced, intelligent,
energetic and dedicated tenant representative to advise and assist. Importantly, be sure to allow ample time to
manage the entire process without undue pressue on negotiations and decision making.