A niche is not something many people immediately associate with real estate. But when in the business, sometimes it is better to have a niche. The longer that you are in the business, the more apparent this becomes.
I started in the real estate business in 1984, and at that time it was mostly residential real estate that you went into. I was lucky to be with a broker that knew people who were on the commercial side of the business. After about one year I already knew that the residential side was not where I wanted to be. And if that was the only place to be, I was on my way out the door.
Tenant Representation in the real estate world is a very specific area of expertise. It is one that only a few agents have the opportunity to get into. This includes knowing something about leases, zoning, negotiation, and thinking outside of the box. Understanding how corporate businesses think is an important part of this work.
This side of real estate is not covered in any of the classes taught before getting your license. Because it is so specific, it is mainly done by learning as you go. If you don’t have the opportunity to get associated with a person who has been on both sides of the fence.
Forming a Specialized Focus: Tenant Representation
Sometimes it happens at the right time, a time when the majority of corporations are downsizing. Site locators were given larger areas to cover. Which meant that they had to rely on real estate agents to help them. They were away from their families a lot, because of having to be on the road doing their job. However not all real estate agents are versed in the commercial field. They are all programed to the home buyer. Thus didn’t pay attention to what was available in the commercial field.
Some residential agents are lucky to get introduced to someone who has worked in the corporate and commercial world. And is a licensed broker, looking to start a real estate business in a specific area of expertise. This is a field that was opened up to me just at the right time. Starting in the real estate world, because I had just gotten my license and was like a piece of clay on the wheel, just waiting to be formed.
You Are Doing What!
Like anything else, a business or product doesn’t gain attention unless people know about it.. That is exactly what we did, word of mouth is sometimes the fastest. We told, some of the site locators who knew my broker. In conclusion, a company was formed that became a “tenant rep” company. Sometimes people in the business thought that we were nuts. How could you make any money if only the tenant was being represented? Because my broker was known in the corporate world and was once a representative of a corporation.
And How Do You Make Money?
Our experience was that we knew how the corporate side of things worked. Had experience on the real estate side as well. Because of this, we knew how the paper mill worked and how to have things in order to make it move faster.
This allowed us to move deals along more efficiently and, in some cases, get paid sooner. We would sometimes negotiate leases up to a certain point before the company took over.
Each tenant that we represented had certain criteria needed to decide if the site was what they wanted or not. Some tenants paid us for doing this, which made the paper mill move faster. And also a commission from the owner of the space, parcel, depending on what was needed. This was always made known up front so as not to cause a problem further down the road.
This is how we made tenant representation make us money. Before this it was thought that the only way to make money in the commercial field was to get a commission. They would give us the areas that they wanted to be in. Basic needs for locations, parking, size, lease information, and time frame.
Because we had the experience of being on both sides of the fence, some companies gave us the go-ahead and negotiated the lease up to a certain point. Then the company would take over. We would do most of the work for the “package” that was needed to hand into the corporation for final approval.
What Does a Tenant Rep Do?
- This person(s) understands the business they are representing. Business requirements, the amount of space needed, preferred location, budget, and specific amenities required. Plans for growth so the locations will accommodate the tenant’s long-term needs. The time frame of when things have to be done.
- The business have done some market research on their own, but will still need more detailed information. The tenant rep would then go and find competition in area, distance from which they will draw their customers, population.
- Tenant rep will look into if they are an allowed use in the area. Drive the area to see what is available i.e. shopping centers, free standing locations. Possibility of thinking outside of the box to find what might be the perfect location. Finding what the market trends are in the area, rental rates, selling of commercial properties and availability.
- In some cases, the tenant rep would do the work needed for the “package” which was needed for the final decision. This would include, pictures of the site, zoning regulations, distance to the nearest competition, the population, new development in the area that would be of interest to them.
Another Niche Opportunity in Real Estate
One growing opportunity that has recently become apparent is “multi-family” because the United States is in great need of this. Single-family houses are getting too expensive for the younger new homeowners to afford. The down payment is growing by the minute.
So there is a way that you can get into the real estate and even own real estate. This is a way that you can increase your income and eventually your real estate portfolio. There is a community that will help you achieve this goal, provide guidance along the way and offer support as you learn, and give you support.
As with any opportunity, it’s important to take time to understand how it works and decide if it fits your goals.
If you have questions or would like more information about anything you see here, please feel free to contact us. We’re always happy to connect.