Acquiring a commercial real estate investment is exciting and lucrative. Unlike residential real estate, commercial spaces command very long-term leases, often 10 years. These leases provide the landlord with a secure stream of income in very few asset classes. Commercial real estate also requires property owners or managers to compete intensely for tenants. With most commercial tenants locked into long-term leases, there are usually far more landlords offering rentals than tenants seeking them. There’s a reason you see so many retail locations vacant for years at a time. Landlords can’t afford to lose prospects because they profit handsomely when a long-term lease comes to fruition. For this reason, they must do everything in their power to secure tenants as soon as possible. If you’re planning on leasing office space, that means hiring a leasing agent to represent you.
Why Leasing Agents Are Indispensable
A leasing agent charges, on average, 3 percent of the rent over the life of the lease. As with residential real estate, the involvement of two agents is assumed, bringing the commission total to 6 percent. This seems steep to many landlords.
Though this adds up over time, the efforts, knowledge, skills and connections of leasing agents are worth far more than their fees. Real estate agents have connections in the industry, so they’ll know quickly when someone is looking for office space.
Commercial real estate is as local as residential real estate. A Leasing agent works with a network of commercial real estate brokers. They find tenants quickly because they market office space through this network. Chances are, one of the leasing agent’s connections is looking for office space in your area.
In addition to knowing who is in the market for commercial space, leasing agents increase their landlords’ chances of success by performing a myriad of services:
- Lease creation.
Agents Are Knowledgeable About Real Estate Law
Creating a lease and executing it properly takes knowledge. A Leasing agent is licensed and experienced. Most have educational backgrounds in business or finance and have studied commercial real estate law as part of their licensing.
They not only create legally tight leases, but they also help clients run their properties while avoiding commercial real estate legal issues.
They Also Have Connections To Contractors If Ever You Need Services
Commercial buildings often need expensive services, which a leasing agent can obtain at a better price while also guaranteeing quality work from contractors.
They Understand The Market And Bring Fresh Insight To Your Strategies
In a competitive market, landlords need to offer what tenants want. In many markets, that means open-plan offices, phone booths for private conversations and fitness centers. A Leasing agent helps prepare the property for tenant showings.
Their industry connections allow them to know ahead of time what tenants in the market want.
Licensed Agents Offer Credibility
Negotiation makes the difference between a 10-year lease and a vacant building. In renting the space at a profitable rent without losing the deal to fierce competition, the licensed agent’s credibility makes the difference. They speak from authority. The leasing agent knows what the competition is doing and at what price the deal can be secured.
In today’s market, concessions often come up in negotiations. Landlords need to be competitive, but they don’t want to give away the farm. A good Leasing agent can advise on many types of concessions, such as:
- Free rent.
- Extra parking.
- Increased security.
Commercial real estate leasing agents provide vital services to landlords. The connections, expertise and credibility they provide allow landlords to secure the lucrative, long-term leases that make commercial real estate investment so attractive.
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