Hopefully all our readers know that TRA doesn’t act as property leasing brokers for third party owners/landlords. Our focus is always on what is best for the tenant. We assist in the process of securing office and/or industrial space for our clients. In that effort we work with a lot of property leasing companies and property owners. Before offering our observations, I want to say that the commercial real estate community in Boise and nearby cities are good people. Men and Women that you would have a beer with.
However, there are times when the property broker will miss the mark in showing the space in its best light. And it often is about “light”, like getting there early before the tour and opening the blinds and turning on the lights. Humans get a first impression the first time they see or encounter something. First impressions stick with us and are unchangeable. Sometimes after seeing vacant and available space I know the first impression was bad and could have been avoided. We appreciate the leasing broker/owner who does the little things and such things can increase the appeal of the space. Knowing what is behind a closed door, and knowing what amenities the building offers seem obvious, but oftentimes are overlooked or not know by the listing agent. Having answers to questions is also helpful. Things like: “How is the parking handled”? “Who are the other tenants in the building”? Etc.
Early in my career I represented property for lease too. During those times I tried to explain to my property owners how a tenant rep broker and the client think when considering the various options. Let’s remember that a tenant rep broker does a property search for all space or buildings that meet the needs and goals of the tenant/occupier. This is often referred to as a ‘Long List”. In an effort to get to a “Short List” the players use the “Rule of the Red Magic Marker”
It goes like this. The tenant team and broker review the list with the sometimes-unstated goal to mark off as many options as possible, i.e. draw a red line thru them. Few people really want to tour every space or building, that could take several days. So, what buildings get marked off first? Anything that stands out in a negative way. Sometimes it can be incomplete leasing information or how the space is presented. Also, “Contact Agent” rather than a stated rent or price. Another example is offering office space as Triple Net vs. Full Service. For office space, offering a “NNN” rent structure will stand out negatively as most office properties are offered “Full Service”. In a “NNN” lease, the cost and often the management of the building operating expenses falls to the tenant. That sure is easier for the landlord but might be a headache for the tenant especially a larger company with a multiple location portfolio. So, those office locations offering NNN structures are crossed off the list.
Industrial space asking rents are most often offered as NNN so the above is not a concern.
Another way not to make the evaluation of the landlord/owner property positive is a slow or incomplete response to a Request for a Proposal. It can be amazing how long it can take to get an initial response. The RFP is designed to ask all the pertinent questions the tenant/occupier feels are important. Occasionally we even see the landlord team decide to ignore the original RFP and respond with a document that is entirely new. I suppose they wish to do more “selling” in their response, or to ease their effort in responding. That is all well and good but I should note that you may be unduly complicating the life of the tenant’s team. So, we suggest you ask before ignoring the tenant’s form RFP.
As we said at the beginning, our local CRE community are good people, the landlords/owners, and broker/agents. Just keep in mind the Rule of the Red Magic Marker.
Don’t get marked off!