The CEO and CFO Have a Chat

CEO: Do we know how much brokerage commission was made by that tenant rep firm we used in our last lease?

CFO: No, we tend to not pay too much attention to that. The landlord paid it. But you’re right. We heard that real estate firm made a windfall profit on our 50,000sf requirement. In fact, they shied away from disclosing that.

CEO: Well maybe the landlord paid it. But if we had worked with a tenant rep company that discounted their fees on large transactions, wouldn’t it have made our rent less?

CFO: Yes, I suppose if we worked with a firm that reduced their fee on larger leases and in turn sought a similar deduction in our rent, or increase in our TI allowance it would have benefitted us a lot. Maybe I’ll talk to a tenant rep that will do that on our next lease renewal or relocation. There must be a better way!

This is a chat that companies should be having with their tenant representation firm. And before they make a brokerage selection. Whether it’s a relocation, new office or even a renewal.

We know the reason why commissions on large transactions are hidden or at least kept silent. We know there’s a better way for companies to hire tenant reps.

Do you know how much the brokerage fee was on the referred to 50,000sf lease? We do. Yes, there was a better way for the company in the dialogue above.

TMC is a corporate real estate advisory business that has been in operation since 1986. We provide diverse services like tenant representation, lease renegotiation, operating expense reductions, and project management of tenant improvement buildouts. With offices in the San Francisco Bay Area and Pacific Northwest we are uniquely located to assist clients throughout the West Coast.

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