Before starting your search for rental space, think carefully about the kind of location and building that will best suit your business, determine the maximum rent you’re willing to pay, and set other priorities, such as the size and configuration of the rental space. Then consider the working relationship you want with a broker. If your rental needs are fairly straightforward, the types of spaces you want are plentiful, and you’re comfortable negotiating lease terms with the landlord, you may find space on your own and forego hiring your own broker. But if you want to work with a real estate broker who represents tenants (ideally, exclusively), you’ll need to do some searching. Here’s how to get the best results.
Finding a commercial real estate broker isn’t all that different from finding a good doctor, lawyer, or dentist. A hefty application of common sense, professional and personal connections, and some independent research usually does the trick. The same method works when looking for a broker. Here’s what to look for:
Other commercial tenants in your community will be the best source of leads for brokers. Ask businesses if they have engaged a broker and whom they would recommend. Look for tenants who appear to be running a healthy business (chances are that their good business sense was at work when they chose a broker, too).
You can narrow your field of inquiry by approaching tenants whose businesses are similar to yours, especially if you’re in a large city where brokers may have divided the market into niches, with some specializing in office space, others concentrating on restaurants and food stores, and others working mainly with light industry. For example, if you’re intending to open an art gallery, you’ll want to deal with a broker who’s familiar with the commercial space that is appropriate for a gallery. The owner of a currently operating gallery may have found just the broker.
In some cities, brokers may even concentrate on specific neighborhoods. If you want to locate in a particular area, to take advantage of adjoining businesses, traffic patterns, or expected rents, it makes sense to look for brokers who have already done deals in the neighborhood.
Be sure to check out brokers who represent buyers—but not sellers—of commercial real estate; they may act as tenants’ agents in leasing transactions too, or they may be able to direct you to a kindred spirit who represents tenants only.
Try to get recommendations from several tenants and businesspeople. You may find that the same name or names pop to the top of everyone’s list. Once you’ve whittled down your list to two or three promising names, you’ll want to ask your contacts about the broker’s strong and weak points, before you interview and choose a broker.
This article was excerpted from Negotiate the Best Lease for Your Business by Janet Portman.