Home» Posts tagged "Tenant Representation"

What Real Estate Needs to Learn from the Legal Industry

Posted on October 15, 2017 by Mike Kushner in Blog, CPBJ Articles, Tenant Representative/Buyer Agent No Comments

This article was originally published on the Central Penn Business Journal and DukeLong.com.

The issue of conflicts of interest between parties exists in a variety of industries. Ethics rules prohibit a single lawyer from representing competing sides in the same transaction. It’s common sense. You can’t ensure fair and equal representation to competing parties if you represent both sides. And clients want more than just fair representation; they want to feel they have an advocate who puts their interests above all others.

So why then, are real estate agents not restricted from representing competing parties in the same way lawyers are? In Pennsylvania, as in many states across the United States, real estate agents are permitted to represent both a buyer and seller (or tenant and landlord) in the same real estate transaction. It’s great for the real estate agents since they make full commissions, but what about the clients they represent?

The regulations and restrictions (or lack thereof) surrounding a real estate agent’s conflicts of interest when representing both parties is cause for concern. If real estate agents were required to approach conflicts of interest in the same way lawyers do, here is how the real estate industry would be reshaped.

The Legal Model

The American Bar Association published and periodically revises Model Rules of Professional Conduct, which have been adopted as legally binding ethics rules governing lawyers in most States. The Model Rules govern conflicts of interest with both current and former clients. Under the Model Rules (and under the ethics rules of the States that have not adopted the Model Rules), law firms may not represent both parties in a single transaction. This means a buyer/tenant must have separate legal representation from the seller/landlord. This gives clients complete assurance that their lawyer is committed solely to their interests. Moreover, one party cannot be pressured into using the other party’s lawyer, because it simply isn’t an option.

Real vs. Perceived Conflicts of Interest: Does It Make a Difference?

Conflicts of interest between two parties can be real or perceived. While real estate agents may argue that they always take a fair and balanced approach in their real estate transactions, if they represent both parties how that can be guaranteed? If one party doesn’t get exactly what it wants, it may question whether its real estate agent did everything possible to represent its interests. It doesn’t make a difference whether a conflict of interest is real or perceived, for both parties to feel adequately represented they cannot use the same real estate agent.

Why Dual Agency Doesn’t Work

Full service commercial real estate firms and brokerage houses tout the fact that they can “do it all.” They represent both a buyer/tenant and seller/landlord in a real estate transaction through what is called dual agency. However, dual agency is not in the best interest of either party, just the real estate agent who makes commission on both sides.

In dual agency, a real estate agent is more likely to steer buyers/tenants toward properties they represent on behalf of their seller/landlord clients. When it comes to negotiating terms, parties represented by the same real estate agent have less negotiation power and may have to compromise more than they would have if they had exclusive representation. And the list of potential abuses goes on.

The challenge is many commercial buyers and tenants aren’t aware that they can work with a real estate agent who is 100% exclusive to representing the interests of the buyer/tenant, often at no cost to them. There are real estate firms right here in Central Pennsylvania that only represent corporate business space users (buyers and tenants) and have resolved to never represent landlords or developers. Buyers and tenants need to be made aware they have options for sole representation and it’s critical they seek this out as the first step when looking for commercial space.

One Real Life Example

In 2016, the California Supreme Court upheld a challenge to dual agency in the case of Horiike vs. Coldwell Banker. The case has gone on to receive national attention regarding the practice of dual agency and the question of whether a single brokerage company can actually represent the interests of two competing parties in a fiduciary capacity.

The original case was based on a dispute regarding the square footage of a property purchased by the plaintiff, Hiroshi Horiike, who was represented by the same company marketing the property for sale, Coldwell Banker. The court determined that Coldwell Banker did not provide the same degree of care to the buyer as compared to the seller of the property, but owed both the same degree of care and representation.

Many of the world’s largest real estate companies both practice and encourage dual agency. The case of Horiike vs. Coldwell Banker brings to light the inherent conflicts of interest in such practices. Some states, like Colorado, have made dual agency illegal. It’s likely that California will follow suit. Given the national attention of this case, it’s reasonable to think other states will now consider outlawing dual agency as well, or at least putting regulations in place to reign in abuses.

The Issue from a Legal Perspective

Tim Anderson, Partner at Pepper Hamilton LLP, represents a variety of clients in real estate conveyancing, leasing, financing, foreclosures and litigation. He shares his perspective on conflicts of interest in real estate transactions.

“In real estate law, we take conflicts of interest very seriously. For example, we cannot represent both parties to a single transaction. We may represent each party in separate transactions if we conclude that we can provide competent and diligent representation to each affected client, the representation is not prohibited by law, and each affected client gives informed consent in writing,” explains Anderson.

“I routinely caution clients about the inherent risks of dual agency in real estate transactions. I warn clients about the risk that their agent’s representation of their interests may be limited by the same agent’s responsibilities to the other party. I’ve found that clients who agree to dual agency, because they think they can protect their own interests, often do not treat their own agent with complete candor,” says Anderson.

Lastly, Anderson offers this advice, “In my opinion, the real estate industry would benefit from adopting rules similar to the rules for lawyers. This does not necessarily require real estate agents to represent only buyers or sellers (landlords or tenants), but real estate agents should not try to represent the buyer and seller (landlord and tenant) in the same transaction.”

To close, I hope that the real estate industry as a whole will reflect on the ways in which other industries handle the issue of conflicts of interest. To allow even the perception and possibility of the conflicts of interest that occurs in dual agency is unfair and unnecessary.

To tenants and buyers looking for commercial space, I urge you to do your research and find an exclusive tenant representative or buyer’s agent who will strictly represent your interests in a real estate transaction. All parties are entitled to exclusive representation; be sure to seek out yours!

This article was originally published on the Central Penn Business Journal and DukeLong.com.

[Online Resources] Real Estate, buyers agent, conflict of interest, dual agency, exclusive, fair, law, lawyer, legal, mike kusher, Omni Realty Group, Tenant Representation, unbiased

4 Risks of Working with Real Estate Brokers Who Represent Both Buyers and Sellers

Posted on June 10, 2015 by mike.kushner in Blog, Tenant Representative/Buyer Agent No Comments

It is a safe observation based on over 30 years of real estate practice that the vast majority of consumers – in this case real estate buyers/tenants and sellers/landlords – do not understand the concepts of “agency.” One might also observe that a significant segment, if not most, of the licensed real estate practitioners do not completely understand the concepts of “agency.” This is not so much an indictment of real estate licensees as it is a statement on the twisted, awkward and convoluted nature of agency laws that have been imposed on our industry by our esteemed governing and regulatory bodies.

The Real Estate Licensing and Registration Act (RELRA) requires that consumers be provided with a Consumer Notice at the initial interview or meeting. Instead of boring you with an explanation of the entire Consumer Notice, I am going to tell you about the most important part:

Buyer Agent (or Tenant Rep): As a buyer agent (or tenant rep), the licensee and the licensee’s company work EXCLUSIVELY for the buyer/tenant even if paid by the seller/landlord. The buyer agent (or tenant rep) MUST act in the buyer’s/tenant’s best interest, including making a continuous and good faith effort to find a property for the buyer/tenant, except while the buyer/tenant is subject to an existing contract, and must keep all confidential information, other than known material defects about the property, confidential.

What does all this mean? If you are buying or leasing commercial real estate you want a Buyer Agent/Tenant Representative to represent you. Here are four risks that you don’t want take:

Risk #1: Your broker will be representing two opposite interests

When you think about a tenant or buyer and a landlord or seller, each has a need that is opposite of one another. Everyone involved also wants the best deal at the best price. This is where the inherent conflict exists. A real estate broker cannot equally represent both parties’ interests while negotiating hard. A better deal for one party means a lesser deal for another party. Someone will always play second fiddle. Do you want to risk this person being you?

Instead, look for a real estate broker who only represents clients like you – either a tenant/buyer or a landlord/seller. Not both.

Risk #2: You may be pushed into an option that is not best suited for you

The second risk of working with a real estate broker who does not exclusively represent one party is that you may not be presented with all of the options available to you. For example, you are looking for office space and your broker represents several landlords who have office space available. You are likely going to be pushed toward choosing from these properties first before they show you outside properties with which they have no association.

While this makes perfect business sense for your broker, it doesn’t benefit you in the same way. You deserve a broker who will exclusively represent your interests as a buyer/tenant and do all the research necessary to find your ideal property – beyond their own internal client book.

Risk #3: You will not have your broker’s undivided time and resources

You are not likely to ever be your broker’s only client (unless business is exceptionally slow). A good broker will try and dedicate adequate time to meet your needs in a timely fashion, but a broker who represents both sides will have even less available time for you. In addition to fielding your questions, requests and negotiations, they will also be juggling the same from the landlord or seller with whom they want you to sign the deal. .

Ensure your needs will made a priority by working only with a broker who exclusively represents you as a buyer or tenant.

Risk #4: You will get a “Jack of All Trades”…but a master of none

As mentioned in the introduction of this article, for some industries it is an advantage to be a “Jack of All Trades.” In real estate, however, specialization if critical for remaining unbiased and motivated to only work in the favor of one side of the negotiating table. A similar example would be a lawyer. Would you want to be represented by someone in court who was advocating for your case as well as the person arguing the opposite side? The same is true when selecting your real estate broker. You don’t want a mediator; you need someone who is completely free to take your side and negotiate 100% in your best interest…and this is a an exclusive tenant representative or buyer agent.

Have you worked with a real estate broker who represented both tenants and buyers as well as landlords and sellers? Was your experience good or bad? Share your story by commenting below!

[Online Resources] Real Estate, advice, broker, buyer, buyer agency, buyer agent, camp hill, CCIM, central pa, commercial, conflict of interest, danger, exclusive, guide, harrisburg, industrial, information, lancaster, landlord, lease, mechanicsburg, Mike Kushner, moving, negotiation, office, Omni Realty, owner, pennsylvania, rent, renter, renting, retail, risks, seller, space, tenant, Tenant Representation, warning, york

6 Signs You Are Using the Wrong Commercial Real Estate Broker

Posted on April 21, 2015 by mike.kushner in Blog, Office Leasing, Tenant Representative/Buyer Agent No Comments

Moving your business to a different location or bigger space is a critical decision that will have a profound impact on both your employees and your bottom line. To help navigate this tricky process, you need a commercial real estate agent/broker who is experienced, creative and professional.

Unfortunately, people often find themselves stuck with an agent/broker that lacks these essential qualities or who simply isn’t a “good fit.” As a result, they risk making a bad real estate decision or no decision at all – and their business suffers the consequences.

If you are currently working with a commercial real estate agent/broker – or you will have to at any point in your future – take note of these red flags that will help you identify whether the agent/broker is fit to best serve you.

Your agent/broker doesn’t make you feel like a priority.

Your agent/broker should promptly and professionally answer your phone calls and email within a reasonable amount of time. He or she should also go the extra mile for you, seeking out options that are outside-the-box, to prove that you are not just another potential “deal” but a person whose business has unique needs.

If for any reason you doubt that you are a priority for your agent/broker, you need to address this with a conversation. If not resolved, you should take your business elsewhere and work with someone who makes you feel like more of a priority.

Your agent/broker offers little advice.

People who are good at their jobs are not afraid to offer sound advice and observations to those in need of help. Why else would you work so hard to become skilled at something if not to use those abilities? If your agent/broker is not offering you advice and guidance in a transaction, then something is not right. Either he or she is too inexperienced to know what is going on or the agent/broker is not particularly helpful by nature. Regardless, you need someone who is helpful and can exercise leadership in this process.

Your agent/broker represents both buyers/tenants and sellers/landlords.

Your commercial real estate agent/broker should be looking out for the best interests of you and your business – and no one else’s. The unbiased advice and specialization of one-sided representation are just a few of the benefits of working with an agent/broker who exclusively represents tenants and buyers.

If you are working with an agent/broker who represents both buyers/tenants and sellers/landlords, even the perception of bias should be enough to make you question whether the properties her or she is showing you are best suited to your needs – and not just a property owned by a landlord/seller he or she represents.

Your agent/broker has not earned their Certified Commercial Investment Member (CCIM) designation.

The CCIM designation is conferred by the CCIM Institute, a commercial affiliate of the National Association of REALTORS®. This designation requires 200 classroom hours and is similar to college graduate-level education. If your agent/broker has earned a CCIM, you know that he or she is committed to the commercial real estate industry, is staying current with changes and trends and has the advanced education to better serve you throughout the entire process. Additionally, CCIMs are bound to the strictest ethical guidelines and standards of practice in the industry today.

If you are not working with a CCIM, you can’t be guaranteed that your agent/broker has this same level of commitment, knowledge and expertise as one who does.

Your agent/broker leaves a bad first impression.

When you meet your commercial real estate agent/broker, take first impressions seriously. Not only are they a good indication of personality and professionalism, this is the same first impression that other landlords/sellers will be greeted with as he or she represents you in potential deals.

Look for an agent/broker who is organized, well put together, confident, but friendly and overall, likeable. These qualities will make it a pleasure working with him or her and these are also qualities that will represent you, the tenant, well when it comes to negotiating leases.

Your real estate agent/broker is a “poser.”

Not all real estate agents/brokers are created equal. Residential real estate agents/brokers, sometimes known as Realtors, are qualified to sell houses and other small residential dwellings but are not usually qualified to give advice regarding commercial property. Residential agents/brokers normally have little knowledge of and experience with commercial properties. This lack of expertise will end up costing you both time and money as well as increase your legal liability. And likewise, a commercial agent/broker may not be the right choice to represent you in selling or purchasing a house, as they are not usually experienced in such matters.

When beginning your commercial real estate search, carefully select an agent/broker that is uniquely qualified to advise you on commercial real estate with a tenant or buyer’s interests in mind.

Do you have experience working with a commercial real estate agent/broker – good or bad? Share your story and what you learned from it by commenting below!

[Online Resources] Real Estate, agent, bad, broker, business, buy, buyer agent, camp hill, central pennsylvania, commercial, growth, harrisburg, industrial, lancaster, lease, location, mechanicsburg, moving, negotiate, office, own, realestate, red flag, rent, retail, signs, space, success, Tenant Representation, wrong, york

The Ultimate Guide for Finding and Leasing a Commercial Space for Your Business

Posted on February 10, 2015 by mike.kushner in Blog, Commercial Real Estate, Office Leasing, Tenant Representative/Buyer Agent No Comments

There are many aspects of running a business that can be daunting to navigate – finding and leasing a commercial space that fits both your needs and your budget is absolutely one of them.

Unless your expertise is in real estate, you can’t be expected to know the market or understand how to negotiate terms like a professional. The good news is a tenant representative, can help you! Even if you’re not planning to change locations right now, educating yourself on the basic process is always a smart idea.

There’s a lot of information floating around out there that can be quite confusing, so to make the task of finding and leasing a commercial space for your business just a little less challenging, we prepared this “ultimate guide” that will give you a crash course on the most important information. Let’s take a look!

Determine how much space you need and where you need it

It sounds pretty obvious that you’ll need to have an idea of your desired square footage before you begin to qualify properties. What’s not so obvious are all of the different factors that can contribute to how much space you need and where you really need it. Location is just one of these variables. Sure, you want an office that is convenient for your employees, but you may also want a space that is convenient for your customers and brings visibility to your business. For a retail business with a storefront, this is particularly important.

Additionally, you need to consider the space you need right now, but also the space you will reasonably need in the future as you grow. With the popularity of collaborative workspaces, you may also want to prioritize an open floor plan that allows you to create an open and flexible work environment. Don’t forget to include any special needs like extra storage space, multiple conference rooms, co-working areas, etc. Carefully think about all of these details when designing your “ideal space.”

Survey the market

Now that you have an idea of how much space you need and where you need it, you are ready to get to know the current market. This is an important step because it provides you with the knowledge to negotiate and to know the market rate for what you’re looking to rent. Compare multiple properties and make notes of the pros and cons of each. A tenant representative, like Omni Realty Group, can help you pull information on these comparable properties like when a tenant’s current lease ends, how much they’re paying per square foot and if they received any other special deals (like the first year rent-free) that could be used in your favor.

Create a short list

With a good understanding the market, you can begin to narrow down your ideal locations to a short list of qualified properties. If you’re a visual person, make a chart or spreadsheet that lets you see just how they stack up against each other. At the very least, you’ll want to closely compare the pros and cons of their location, amenities and services as well as the history of the current landlord.

Visit them first-hand

The next important piece of comparing those qualitied properties from your short list is to tour them in person to really see how the space looks and how it feels walking through it. It’s amazing how one property may appear to be in the lead on paper, but after visiting each in person, another will rise to the top. Since this is a space you’ll be spending quite a few hours in, it’s worth doing your due diligence and touring each one that you are seriously considering. To get the most out of these tours, you should have your tenant representative with you. He or she will offer a second set of (expert) eyes and ask questions or make note of details you might otherwise overlook.

Put together an RFP

After your site visits, your tenant representative will prepare a Request for Proposal (RFP) and distribute it to the qualified candidate buildings that have “passed the test” thus far. Once you receive the responses from the landlords, you can compare all of the offers side by side. A tenant representative can help you create a quality comparative lease analysis that will allow you to compare all proposals as close to apples-to-apples as possible.

Negotiate

Now the “fun” begins! Negotiations can be one of the most stressful steps of the leasing process, but they are a necessary part of formulating a lease both parties are comfortable with signing. It’s highly recommended to seek counsel to review all legal documents and protect your best interests. This is also where a tenant representative is an invaluable resource and can guide you throughout the process.

Customize the space to your needs

With a successful negotiation process, you are ready for one of the final steps which is planning your new space and customizing it with construction, if necessary. Your business is unique, so you can’t expect someone else’s former office space to fit your exact needs. Construction, whether that’s putting up a few cubicles or completely knocking down walls, is a delicate process for a renter. You need to make sure you have explicit approval from your landlord to protect yourself and any investment you’re putting into customizing your space. A tenant representative can expertly navigate the terms of construction and can sometimes negotiate the cost to be covered by the landlord, either in part or in full. This is yet one more very important scenario where you’ll want a TR on your side!

There you have our “Ultimate Guide for Finding and Leasing a Commercial Space for Your Business” with a lot of valuable information to get you started in the right direction. Most importantly, keep in mind that there is even more information you’ll want to consider throughout your hunt for office space and seeking the help from a professional tenant representative can save you time, money and headaches along the way – so don’t be afraid to start a conversation with one today!

Do you have a question about finding and leasing a space for your business? Ask Omni by commenting below!

[Online Resources] Real Estate, advice, business, buyer, buyers agent, camp hill, central pa, expert, guide, harrisburg, how to, lease, Leasing, location, mechanicsburg, Mike Kushner, office, Omni Realty Group, pennsylvania, space, tenant, Tenant Representation

Success Story: Pennsylvania Coalition Against Domestic Violence Finds New Space to Transform Work Flow

Posted on October 29, 2014 by mike.kushner in About Us, Blog, Community, Local Market, Success Stories No Comments

Every day I work exclusively with different businesses and organizations to help them improve their efficiency and work flow by finding an office space that better meets their needs – and budget. It’s worth taking a moment to reflect on some of the success stories of my clients and the difference their new work environment has made for their organization as a whole.

This month, let’s look at the Pennsylvania Coalition Against Domestic Violence and how their change in office space has improved their ability to better serve their constituents. Peg Dierkers, PCADV’s Executive Director, was kind enough to offer some insight into her experience working with Omni Realty Group and the comparison between her old office space versus her new location.

But first, some Background…

The mission of the Pennsylvania Coalition Against Domestic Violence (PCADV) is to eliminate personal and institutional violence against women through programs providing support and safety to battered women, direct services, public information and education, systems advocacy and social change activities. This honorable organization has helped hundreds of local women escape violence and improve their quality of life.

PCADV’s old office was located in the Gateway Corporate Center on Route 22 and was originally flex space that had been converted into office space. It was easy to see that the industrial space was not made for an office environment. It was a maze of space that limited workflow and segmented staff, not to mention its inefficient use of energy that raised heating and cooling costs.

Fortunately, I was connected with PCADV and was excited to jump right in to help solve the problem.

Finding a new “home”

“Mike took special care to first understand our organization,” said Peg Dierkers, Executive Director. “He wanted to know about our company culture, workspace needs, where employees were commuting from and also considered our desire to stay easily accessible to people who need our services.”

Finding the right workspace for a business or organization is about so much more than simply square feet. There are countless options that can accommodate size, but what you really need to consider when choosing the perfect office space for your business are the various things that contribute to your efficiency, functionality and ultimately your culture.

I identified a variety of spaces well-suited to PCADV’s unique needs and toured each space, offering expert advice on both the benefits and limitations to consider. When the ideal space was identified, I then negotiated hard for a good deal and provided market research for comparison. I also negotiated a detailed work letter with the landlord on behalf of PCADV to ensure the space would be customized to fit their needs.

The result

It took about one year from the time we began looking for new space to move-in, but the process was certainly worth it! PCADV’s new “home” is located at 3605 Vartan Way, Suite 101, Harrisburg, PA 17110 and the staff couldn’t be happier. They have been able to update and modernize nearly everything – even including their IT infrastructure. The space is much more communal and promotes cross-collaboration among employees. Most importantly, especially for a non-profit, is that the new lease is saving PCADV a ton of money which is more resources they can put back into the community.

This was Peg’s first time working with a commercial broker that is exclusively tenant rep/buyer agent and the experience is one she will always remember. Her biggest piece of advice for any other business seeking new office space is, “Never go it alone! Omni is a built-in expert consultant that can proactively eliminate problems and increase the value of the space you select.” Identifying the right space and negotiating a favorable lease enabled PCADV to move to the space they are in today.

The view of PCADV’s new office space via Google Maps.

The view of PCADV’s new office space via Google Earth.

Are you a business or organization looking to expand into a bigger commercial office space? I can help match you with the perfect location just as I did for PCADV. Contact me today for a free lease review and office space assessment!

business, buyer agency, central pa, client, collaboration, commercial, efficiency, exclusive, harrisburg, lease, Mike Kushner, negotiation, nonprofit, Office Space, Omni Realty, pcadv, pennsylvania, pennsylvania coalition against domestic violence, story, success, Tenant Representation, work flow

Mid Atlantic Real Estate Journal – August/September 2014

Posted on September 8, 2014 by mike.kushner in In the News No Comments

In the August/September issue of the Mid Atlantic Real Estate Journal, Mike Kushner, CCIM, owner of Omni Realty group is featured. His article ” Four Reasons Why You Need Tenant Representation” focuses on the core benefits of utilizing an exclusive tenant representation and buyer agency firm when negotiating a commercial real estate lease.

View the entire article.

[Online Resources] Real Estate, article, buyer agency, commercial, industrial, mid atlantic real estate journal, Mike Kushner, news, office, Omni Realty Group, publication, retail, Tenant Representation

The Story Behind Our Passion: Why We Chose to Exclusively Represent Tenants and Buyers

Posted on August 27, 2014 by mike.kushner in About Us, Blog No Comments

At Omni Realty Group, I take great pride in being Central Pennsylvania’s only exclusive tenant rep/buyer agency firm. I carefully chose this specialization because of my passion for educating and representing business owners to ensure they receive a fair deal from their seller or landlord.

As fellow local real estate agent, Bill Gladstone, owner of Bill Gladstone Group, NAI CIR says, “In today’s world of discovery and specialization, generalists are falling by the wayside in all industries.” We embrace this same mindset which is why we purposely selected to only work with tenants and buyers in the commercial real estate market.

As the owner of Omni Realty Group, I have been exclusively practicing Tenant Rep/Buyer Agency since 1998, when I first established the company. Prior to forming Omni Realty Group, I worked as a traditional commercial agent. My 28 years of experience extends across all real estate sectors including, Office, Industrial, Retail, and Multifamily. In addition, I have also developed office, retail and multi-family projects.

“It is hard to be both a landlord’s seller’s as well as a tenant’s buyer’s broker and do both well,” says Gladstone. “The day of trying to be all things to all people just doesn’t work.”

Being a Tenant Rep/Buyer Agency firm provides me with an opportunity to better serve my clients by getting to know them and their businesses on a more personal level. I must have a detailed understanding of their business operation, financial position and their risk profile to negotiate the most favorable terms on their behalf. This information is extremely confidential, so I work hard to develop a deep level of trust with each and every client.

The clients I serve are any individual or business entity that is involved with commercial real estate. This includes people who are looking to relocate or establish a new location, re-negotiate their current lease or invest in commercial real estate.

As I look to the future, my main goal remains the same – to educate business owners, facility managers and investors about tenant representation/buyer agency. Many people are unaware that they need representation just as a landlord or seller has representation. There is also a common misunderstanding about Pennsylvania real estate agency law and how it authorizes the types of business relationships that a real estate agent can have with a consumer.

Unless you have a tenant representation/buyer agency agreement with your agent, he or she is not exclusively representing you and does not have a legal obligation to represent your interests. My exclusivity as a tenant rep/buyer agency allows me to avoid the inherent conflict of interest that exists when an agent represents both the tenant/buyer and landlord/seller.

One final thought from Bill Gladstone says, “The sooner you discover your niche the sooner you will define the added value you bring to your clients.” My niche is advocating for the best interests of tenants and buyers. I am fortunate to have discovered this passion and to fully embrace it as the focus of my day to day work. Doing so allows me to provide the highest level of service, loyalty and confidence to each and every client.

What else would you like to know about Omni Realty Group? Just ask me and I am happy to answer!

about, bill gladstone, buyer agency, buyer agent, Commercial Real Estate, industrial, Mike Kushner, office, Omni Realty Group, passion, pennsylvania, retail, specialization, specialty, story, tenant advocate, Tenant Representation

7 Dangers of Not Having Tenant Representation

Posted on July 24, 2014 by mike.kushner in Blog, Tenant Representative/Buyer Agent No Comments

The right office space has a profound impact on how your business functions. It contributes to more efficient operations, better employee mood and the ability to accommodate growth. However, even once you have found the ideal space, one major obstacle still remains before you can open for business – negotiating the lease.

This is one of the most important steps in the leasing process. You want to be sure that you are getting a fair deal that is mutually attractive to both you and your landlord. This is all the more reason to have tenant representation to ensure your interests are equally represented. Still, many people forgo tenant representation and as a result have found themselves in some undesirable circumstances.

There are a myriad of things that could occur without tenant representation. Here are just a few of the most common dangers of not having an expert on your side when negotiating your lease.

1. Leasing too much space – A tenant representative will assist you (along with a design professional) in calculating your actual need for space and determining your particular layout needs. It’s easy for your eyes to be bigger than your budget. While that huge corner office looks great, it may also be more than you need and can afford right now. A tenant representative will help guide you with how much square footage you actually need at this time and negotiate this for you on your behalf.

2. Missing valuable opportunities – A professional tenant representative can identify a property that you may have overlooked, but that offers you what you need and for lower rental rates. Experience and expertise are two valuable sets of skills that tenant representatives brings to the table, giving them the ability to find hidden gems you might miss out on otherwise.

3. Paying higher than market rental rate – Tenant representatives stay current on market rates and know what an appropriate price is based on different factors of the property. This same expertise would take you hours of research to develop and may still not provide you with all the information you need. Additionally, tenant representatives use the market rental rate as leverage for negotiating fair prices.

4. Paying higher than market effective rental rate – In addition to the market rental rate, you must also take into consideration the inducements and incentives that are being currently offered in the market. These impact the true rental rate (or your rental rate calculated after such perks, like 6 months of free rent, are factored in to the life of the lease). A tenant representative will know what other spaces are offering as incentives and be able to use this as additional leverage for securing you a similarly attractive deal.

5. Understanding the difference between useable and rentable square feet – In a nut shell, useable space is what you personally occupy from wall to wall. Rentable space includes your useable space PLUS any common areas, such as lobbies, restrooms, storage rooms and hallways that are shared with other businesses. A tenant representative will educate you on the difference between the two and ensure that your lease is structured with the appropriate definition so that you are not taken advantage of.

6. Understanding the components and costs of a CAM charge – Common Area Maintenance (CAM) charges are billed to a tenant in addition to the cost of rent. They cover work performed on shared spaces, such as lobbies, bathrooms and hallways that include duties like cleaning and repairs. Think of it almost like a Home Owners Association (HOA) fee, but for commercial office space. A tenant representative knows to inquire about these costs and take them into account for your overall budget.

7. Understanding lease clauses – There are many lease clauses that are written in legalese. Two clauses that are common to most commercial leases are attornment and non disturbance. An attornment clause ensures that a tenant continues paying rent to any new landlord throughout the remainder of the lease term, even if the property is foreclosed or sold. A non-disturbance clause gives a tenant the right to continue occupying the leased premises as long as the tenant is not in default, even after the property is sold or foreclosed. Both of these can be complex and confusing to someone who is not experience with legal terms, so it is important that you have tenant representative and a real estate attorney to advocate for your best interests before signing a lease with or without these clauses.

Have you personally experienced any of these pitfalls when signing into a lease? Share your story by commenting below!

buyer agent, commercial office space, dangers, lease, office, Office Space, pitfalls, realestate, Tenant Representation

8 Things You Need to Know Before Renewing Your Lease

Posted on June 30, 2014 by mike.kushner in Blog, Commercial Real Estate, Tenant Representative/Buyer Agent No Comments

Negotiations of any sort can be nerve-wracking and intimidating, especially when it comes to negotiating a lease renewal. Landlords can drive a hard bargain, making you feel like you don’t have any other options or say in the matter. The good news is…you do! Here are 8 things that can boost your negotiation power when it comes time to renew your next lease.

1. Be a good tenant

This is so basic, yet so often it’s advice that isn’t followed. Taking care of your rental space will give you leverage when it comes to negotiating your lease renewal. If issues arise between you and your landlord, resolve them quickly and amicably. It’s only to your benefit to be on good terms with the person who determines your rental rates.

2. Start early and understand your options

Particularly in a very tight commercial real estate market, you’ve got to allow at least 9-12 months for the process to play out. It can take several months to research your alternatives, open up negotiations with prospective landlords (especially concerning tenant improvements), and then come back to your current landlord. And you’ll want to allow 2-4 months if you have to plan a move (assuming you’re an SMBE like us).

3. Understand your market – and concessions that new tenants can extract.

While market rental rates are important to understand, there are a number of other considerations new tenants may enjoy. These include tenant improvements, rent holidays and other benefits.

Understanding these will not only give you a sense for what you might expect if you go elsewhere, but it can also help you negotiate your current renewal. Why shouldn’t you enjoy at least part of those benefits on the renewal?

4. Consult with (if not retain) a broker.

I’m a big believer in at least talking to experts in a field. Brokers can give you a sense for the market, current conditions, and offer other valuable input. I generally recommend using them to represent you in a lease negotiation. Depending upon the size of your business, this can represent anywhere from a $350k to a multi-million dollar obligation over a 3 to 5 year period. The truth is, while you may know your business better than anyone, you’re probably not an expert in commercial real estate. Seek out advice from someone who is!

Bonus Tip: If you are going to use a commercial real estate broker, I suggest using a tenant only representative, as they are less likely to be conflicted than brokers who may represent either side.

5. Depending on how much leverage you have, work to “share the savings.”

Just as you may want to avoid the headaches and costs associated with moving, your landlord may have the same interest. If you’ve been a good tenant and are paying near market rents, the last thing your landlord wants to deal with is several months of vacancy, showing the space, negotiating and paying tenant improvements, and then having to deal with an unknown. So work to value how much benefit each side is getting out of the renewal and see if you can’t find some common ground.

6. Think outside the box and understand your landlord’s situation.

Your landlord is interested in three things: 1. the underlying value of the property; 2. current income/cash flow from the property; and 3. avoiding headaches. Understanding the relative importance of each can be very helpful in your negotiations.

For example, commercial property is essentially valued at a multiple of cash flow (it’s a cap rate if you want to be specific) over a period of time, with an emphasis on future cash flows. If the landlord is thinking about re-financing or selling the property in 2-3 years, she will want to boost the cash flow in that later period. This can provide you with a path to reducing your near term rental outlays in return for increasing the rent at a time when it particularly matters to the landlord.

7. Put together a spreadsheet balancing overall costs for your various rental options

Feel free to let your landlord know you’re doing this, and make sure that you’re getting all the information you need to make a balanced and informed decision. This will also alert them to the fact that you are exploring other options which can work to your benefit in lease negotiations. (A good tenant rep broker has software to run this analysis.)

8. Get your hands on a bunch of actual lease agreements and extensions.

This can help give you ideas for different terms that you might want to incorporate into the lease that you may not have thought of. Of course, if you have representation, you should encourage them to do this -you’d be surprised how often this valuable opportunity is overlooked.

No matter where you stand in your current lease, it’s always a smart idea to follow these pieces of advice now. Some you can do immediately and others you can plan for in the future. Doing so can provide you with a valuable return, especially if it helps you to negotiate a lease renewal with favorable terms that keeps you in a space you love for less while building a good relationships with your landlord.

Do you have a specific question about renewing a lease? Let us help you find an answer by sharing your question in the comments below!

[Online Resources] Real Estate, buyers agent, Commercial Real Estate, lease, Office Space, Omni Realty, realtor, Tenant Representation

4 Reasons You Need Tenant Representation

Posted on May 29, 2014 by mike.kushner in Blog, Tenant Representative/Buyer Agent No Comments

In a recent blog, we talked about what makes Omni Realty Group Central PA’s only exclusive Tenant Representation and Buyer Agency Firm. But more than just understanding what it is we do, it’s important to also understand why working with a firm that exclusively offers tenant representation and buyer agency will greatly impact your leasing or buying experience.

Real estate brokers each have their own specialty. Just as you wouldn’t see an eye doctor to get your hearing checked, you must also carefully consider the type of broker you seek to represent you in a real estate deal. The misconception is that only sellers use professional representation. Tenant Representation and Buyer Agency firms prove that this is simply not true for we exclusively represent the interests of the tenants and buyers.

In case you’re not yet convinced of the importance of representation in a real estate deal, let’s take a closer look at 4 reasons why you need tenant representation/buyer agency to ensure fair and favorable results.

1. Unbiased Advice

Serving only the interests of our clients – who are all tenants/buyers – allows us to offer unbiased advice and up-to-the-minute market information tailored to what they need to know as well as to aggressively represent them in negotiations. We view every scenario through the eyes of the tenant/buyer and advise them on the options that will best serve their unique needs.

2. One-Sided Representation

It is our steadfast policy to never represent landlords or developers. This eliminates any conflict that can result from trying to represent the interests of both sides. It also ensures that our loyalties lie solely with our tenant/buyer clients. One of the most valuable aspects of working with an exclusive Tenant Representation and Buyer Agency firm is the peace of mind knowing you are always their top priority.

3. The Benefit of Specialization

The general perception among businesses has been “a broker is a broker,” with little notice of a broker’s specialization and how it might impact the business’ negotiations for office space. Exclusive Tenant Representation and Buyer Agency firms, like Omni, specialize in representing the needs of the tenant/buyer only. We know how to structure deals and negotiate in your favor to achieve the most desirable outcome.

4. No Cost To You

Best of all, tenant/buyer brokers are not paid for by the new tenant/buyer; instead, the broker is paid his or her commission by the landlord/owner (99.9% of the time). The commission fee is negotiated with the landlord/owner and the listing agent before they start marketing the property, and that fee is usually paid regardless of whether or not you have a tenant representative/buyer agent (bigger commission for them). The landlord/owner and leasing agent may not recommend hiring a broker for this reason along with knowing that an experienced tenant rep/buyer agent broker will make them “sharpen their pencils.”

Take special note: If the listing agent insists it is not necessary to hire a tenant/buyer broker, you can be certain that move would only be in their best interest. You always want someone representing your best interests during this complicated process – especially if it is no expense to you!

Why have you chosen or not chosen to use tenant representation in the past? Do any of these points compel you to think differently in the future? Join the conversation by commenting below!

buyer agency, central pennsylvania, Commercial Real Estate, harrisburg, Omni Realty Group, Tenant Representation