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As seen in
NEW YORK
REAL ESTATE JOURNAL
Manhattan Forecast
February 7, 2001
In a landlord's marketplace, tenant
specialists have the edge
by JAMES MEISKIN, PLYMOUTH PARTNERS,
LTD
 With
rents on the rise in a reinvigorated marketplace, companies
looking for new space need all the leverage they can get, especially
in a landlord's market in which there is growing resistance
to concessions.
While dual-representation firms will continue to do business,
only the full-time tenant representative who evaluates properties
strictly from the standpoint of meeting client criteria has
the advantage in leveraging the best deal possible while avoiding
potential conflicts of interest.
Professionals who continue to represent both owners and tenants
always risk getting into uncomfortable situations in which both
sides rub together in a transaction. When that happens, the
ability to aggressively negotiate is compromised.
Only a broker, free of owner-client entanglements, can do the
best job for the client in negotiations that may involve numerous
property owners in addition to the current landlord.
For the tenant up for
renewal, who may be contemplating moving, it is important to
explore all available options. Requests for proposals should
be distributed to all owners of available spaces and to the
current landlord.
By objectively
exposing the tenant to every opportunity within the market
that meets his or her economic, geographic and space standards,
the tenant representative makes it difficult for the landlord
to feel that the tenant is captive or for the owner of new
space to assume that the tenant is ready to sign.
Usually the buildings involved in the site
selection process are played off against another, right up to
the bitter end.
Because it is easier, and usually more economical, for the tenant
to stay in place and renew and restructure the current lease,
the skillful tenant rep exerts leverage to persuade a prospective
landlord that the tenant will instead renew the existing lease
unless terms can be substantially enhanced at the prospective
location.
On the other hand, the current landlord is more apt to offer
significant concessions if he is persuaded the tenant will instead
move.
In today's market, owner-tenant negotiations do not have to
be out and out adversarial, as tenant representatives readily
recognize, based on years of experience in complex negotiations
and an understanding of the nuances that underlie successful
bargaining.
After all, it's in the interest of both parties to maintain
a smooth, continuing relationship. And tenants and owners do
share certain concerns, such as further increases in property
taxes and building operating costs.
James
S. Meiskin is President of Plymouth Partners, Ltd.
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