What is the most important question to ask when selecting a broker for your next office lease?

Most Important QuestionCommercial real estate is a “relationship” business so tenants tend to work with brokers they know. Makes sense. Everyone knows someone in commercial real estate. It may be their kid’s little league coach, college roommate, neighbor, relative or someone they sit next to on the commute train. And often, that’s who people work with for their first few office leases.

But there is a built-in conflict of interest in office leasing that few tenants understand and even fewer brokers discuss. More than 90% of the commercial real estate brokers represent both landlords AND tenants. No one would hire a lawyer who works for the other side. Yet, the equivalent happens every day when tenants work with commercial real estate brokers and firms that also represent landlords. So, ask the broker that coaches your kid’s little league team if they or anyone else in their office represents landlords. If so, you have a built-in conflict of interest.

Don’t Be Afraid of the Big Bad Scarcity Wolf

It is in the best interest of brokers that represent landlords to keep perceived asking rates as high as possible and vacancy rates as low as possible. Agents that represent landlords talk about the hot market and scarcity of space. But don’t be afraid of the big bad scarcity wolf. Firms that specialize in tenant representation are only focused on finding value and multiple alternatives for their clients. If your broker is leading with the scarcity card and isn’t finding you multiple alternatives, then you either have an underperforming broker or a broker with a conflict of interest.

For our complete roadmap: How Do I Find Office Space?

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