You Should Contact a Retail Broker Before You Lease a Restaurant Space
Posted by Derrick on April 17th, 2019
When looking for a retail space for lease, a lot of first-time retailers believe they can save money by acting as their own retail broker. Sometimes even established tenants are guilty of this. But with signing a new lease or a lease renewal, a commercial real estate broker is often key. Not just for tenants, but landlords.
So, how much does a retail broker charge?
A retail broker in DC may typically charge around 3-6% commission on each deal. They represent either the tenant or the landlord and sometimes, a broker can represent both. Some tenants believe they can negotiate a lower total cost of rent on their own. That by not hiring a real estate broker, therefore forgoing commission fees, the landlord will take a lower rent. This is not the case. Landlords want to get the highest rental rate they can to maintain or increase the market value of their building. But in return, they may offer concession packages to the tenant.
In most cases, the landlord pays the commissions. The landlord includes this cost in the operating expenses of their building. In very rare cases, the tenant pays the commission. But this is not common.
WHAT DOES A COMMERCIAL REAL ESTATE BROKER DO? AND HOW CAN THEY HELP?
Well, one of the more valuable things about having broker representation is cost savings. A tenant broker helps aggregate the best deal for the tenant. Whether you’re looking at restaurant space for lease or retail space for lease, a tenant broker can use their experience, skill and market knowledge in lease negotiations. In addition, having a broker can also save you money by pointing out potential lease details that could end up costing thousands of dollars down the line. Unplanned for expenses can ground a growing business.
It’s better for business owners to focus their time on their business. Finding the right restaurant space for lease or the right retail space for lease in DC and other major cities can be time-consuming. For a landlord, weeding through potential tenants can be a headache. There are a lot of would-be tenants are under-qualified, to say the least.
The real estate broker’s job is to do the legwork for the tenant and the landlord. They help locate spaces for lease that meet the tenant’s needs, then contact landlord on the tenant’s behalf. They also screen potential tenants to ensure they meet the landlord’s criteria. This helps save a great amount of time.
Established brokerage firms such as MILLER WALKER Retail Real Estate have a database of listings and maintain a working relationship with other brokers, tenants, and landlords.
RESOURCES AND EXPERIENCE
Commercial brokers have access to information that the general public doesn’t. This often includes demographic reports that detail employment and population density and average household income. They know of area trends and nearby retailers. In addition, they advise, draft proposals and negotiate lease terms.
HOW TO CHOOSE A RETAIL BROKER?
Ultimately, tenants and landlords should use a broker with a track record of success and experience. The Business Journals and Bisnow feature local business and industry news and are a good source of who’s who in the market. If you are a tenant or a landlord looking for a retail broker in DC a fantastic choice would be MILLER WALKER Retail Real Estate.
About the AuthorDerrick
Joined: April 17th, 2019
Articles Posted: 1
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