How Do We Get Paid?

Quite often we are asked the question, “So how do you get paid?”.  Just like you, we have bills that are due, food to be purchased, and the fun toys everyone ‘needs’.  Without the client making a direct payment to us, they wonder how we can apparently work for free.  Let’s shed some light on the issue.

In the commercial real estate market, Landlord’s have a commission fee built into their lease transactions.  Most banks require them to account for fees’ such as lawyers, brokers, maintenance, etc.  The Landlord typically has factored costs for the brokers, of which if the Tenant does not retain Tenant Representation, the Landlord’s broker keeps the entire fee.  If the Tenant retains a Tenant Representative they share the commission with the Landlords broker (similar to residential real estate).  Any commission not paid normally finds it’s way back to the Landlord.

One of our clients asked, “If you get paid off of the gross lease value, doesn’t negotiating a lower rental rate hurt you?”.  In the short term, yes it does.  However, we are in Tenant Representation for the long term.  If we are unable to provide value to our clients, then we won’t have future clients.  By working diligently for the Tenant, we hope to show our value and obtain future referrals.  We believe that the Tenants deserve the same professional representation as the Landlords.  In most cases, by working with a Tenant Representative they are able to save companies much more than the fee they earned.

We have saved our clients thousands to millions of dollars over the term of their lease.  Savings that can be used to hire new employees, purchase new equipment, given as an end of year bonus, etc.  If you are considering relocating, resizing, or renewing, be sure you have a Tenant Representative protecting your interests.

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