shutterstock 284845850 blog

Independent advisers vs leasing brokers: Who gets you a better deal?

15 June 2015, by Dean Croucher

As a tenant thinking about leasing new premises, you have an important decision to make. Do you:

  • Manage the process in-house?
  • Use a leasing broker?
        or…
  • Appoint an independent adviser/tenant representative

Managing in-house

Managing the process in-house can often be tempting as it avoids engaging and paying for advisers. Many clients no doubt think 'How hard can it be?'. However, as pointed out in our eGuide on Leasing Premises, there are a number of elements that make up a successful solution. Getting each one right will impact on the commercial deal you get (now and in the future) and how well the new premises support your business moving forward. To understand each element in more detail, download a copy of our eGuide on Leasing Premises. And remember, in-house resourcing also comes at a cost as staff have their core roles to perform as well!

Using a broker 

An alternative or hybrid option is to manage it in-house, but use a Leasing Broker to search for options. Again, this is often seen as a cost-effective option as the leasing broker is paid by the landlord, not the tenant. However, be aware of the 'wolf in sheep's clothing'! 

All of the major real estate services firms have leasing brokers who specialise in the commercial leasing market – office, retail or industrial space. These brokers tread a very fine line in our view. By night, they are developing relationships with the building owners and developers, obtaining exclusive or general agency listings. Understanding what's new or what's planned to be new from the supply side of the market. 

However, by day they are fostering relationships with tenants and offering to help them find the right solution – working on the demand side. Because of their market knowledge and network, they are well informed and appear very useful and informative from a tenant perspective. 

But remember who is paying them. It is difficult, in our view, for the leasing broker to provide independent and objective advice. On one hand, they have a responsibility to their client (the landlord) who is paying them. They have a duty to maximise the commercial transaction – the more space they lease, the higher the rental they obtain and the longer the lease term – results not only in a better deal for the landlord, but generally a higher fee for the broker who is typically paid on a commission scale of fees. 

With this duty in mind, how can they equally provide objective advice to the tenant – minimise the space you need by adopting new work practices, negotiate a lower rental by creating a competitive process and create tenure flexibility and tenant-friendly lease terms through the negotiation process?

We believe these competing agendas create a conflict of interest and potentially undermine the tenant's ability to get the best deal.

Independent

The alternative approach to managing in-house or using a leasing broker is appointing an independent property adviser or tenant representative. These practices are generally boutique firms that specialise in acting for tenants only and therefore have no potential for a conflict of interest. An independent property adviser is paid by the tenant for professional advice in much the same way you pay for advice from a solicitor or accountant, for example. The independent adviser can advocate on your behalf and provide objective advice on the best solution/option for your business. In many cases, the best solution may involve staying in your current premises or sharing space with someone else. Regardless of the best option, an independent adviser can provide free and frank advice without relying on a leasing transaction to occur to get paid. 

Equally, an independent adviser will generally provide a wider suite of services that will help inform the tenant about how to best use the premises once leased. For information on maximising the opportunity new premises provides, download our eGuide on Workplace Planning.

If you want the best deal and to maximise the opportunity new premises provide, then the answer is simple. Appoint an independent tenant-only adviser. Let them work with you to fully understand your business and how you can create the best solution together. And leave the leasing brokers to advocate for the landlord while your staff get on with their day job!

...

About the author

Dean is one of NZ's leading property advisers with 25+ years’ consulting experience acting for major tenants and owner-occupiers. He specialises in property strategy, tenant representation, project leadership and major transactions. He also continues to provide peer review advice across all major projects.

Other posts by this author...

07 April 2017

TwentyTwo appointed to five categories of Government Property Panel

TwentyTwo has recently been appointed to the Government Property Panel, an appointment that recognises our deep understanding and experience of working for the main Crown/Government agencies over the last 27 years.

Read more...

21 December 2016

Advocating for the Tenant at PINZ Government Property Event

At the recent Property Institute Government Property event in Wellington, TwentyTwo’s Dean Croucher joined David White from Government Property Group, Peter Dow (deputising for an unwell Maurice Clark) and Steve Maitland from Colliers to discuss...

Read more...

07 December 2016

Team TwentyTwo's Xmas parade

Team TwentyTwo celebrated the end of another fantastic year last weekend by heading up to Auckland to see Coldplay live at Mt Smart Stadium! The previous night, our team got together for a few quiet red...

Read more...

21 November 2016

Auckland CBD transformation takes shape

Major transformation of the Auckland CBD continues at pace with the demolition of the former Downtown Shopping Centre now complete (above left).

Read more...

02 November 2016

We're hiring! Full-time Property Consultant in Auckland

We are seeking outstanding professionals to join a growing team, making a difference to businesses around the country.

Read more...

08 September 2016

TwentyTwo's Paul Mautz is Property Advisor of the Year

Paul Mautz, Associate Principal at TwentyTwo, is the inaugural winner of the Property Institute of New Zealand's Property Advisor of the Year award.

Read more...

14 August 2016

Creative thinking delivers value for Commerce Commission

Faced with a rapidly growing Auckland team and a new strategic focus on Auckland, the Commerce Commission had to make a choice about exiting early from a lease and relocating within the CBD.

Read more...

09 May 2016

Procurement solution fuels major step towards biodiesel in NZ

Z Energy’s customers in Auckland, Waikato and the Bay of Plenty will soon be able to fill their tanks with ‘Z Bio D’ – a sustainable diesel which will be manufactured at its new bio-fuel...

Read more...

31 March 2016

Wellington Airport runway extension – unleashing potential

We're passionate about the success of Wellington and its contribution to the economy. Our business contributes to that success by helping organisations make better property decisions that help them unleash their potential.

Read more...

21 January 2016

Rise of the independent – why independence is better

Independence was a founding principle for TwentyTwo because we believed it was a critical differentiator that mattered to clients.Today, in our sector, we think it matters even more.

Read more...

18 December 2015

After a big year, a big day out

It's been fantastic year for TwentyTwo thanks to our hard working and talented team.So we decided to celebrate and reflect with a big day out.It was a cracker.

Read more...

15 December 2015

22 = 25

As 2015 comes to an end, it’s time for some reflection.It’s been a year of positive change and big progress for TwentyTwo.

Read more...

28 September 2015

Part 3: A journey from greenwash to best practice

In Part 3 of a series of blogs on the New Zealand Green Building Council, we review the future of NZGBC and what it offers organisations, particularly tenants and owner-occupiers…The NZGBC is 10 years...

Read more...

22 September 2015

Part 2: NZGBC builds on firm foundations

Following Part 1 published last week where we introduced the NZGBC and outlined our early involvement and renewed commitment to the Council, Part 2 gives a brief history, along with our experience of tenant/end...

Read more...

14 September 2015

Part 1: NZGBC gets the green light

TwentyTwo has recently renewed its commitment as a member of the New Zealand Green Building Council (NZGBC).And since World Green Building Week is all set for 21-27 September, we’re marking the occasion with a series of three blogs over three weeks to highlight NZGBC’s role in working to improve the quality and sustainability of NZ properties, as well as our involvement over the years.

Read more...

24 August 2015

Wellington projects make progress

Great to see some real progress on site last week with two of our projects… Cuba Central On Monday morning, I attended the ‘ground breaking’ ceremony for Cuba Central – the new Creative Technologies and Arts Centre being developed by Willis Bond for WelTec and Whitireia.

Read more...

18 August 2015

TwentyFive years of disruption for TwentyTwo

‘Disruption’ is a buzzword in the business world at present and, here at TwentyTwo, we also talk about being disruptive.About being a challenger brand.Challenging convention.

Read more...

12 August 2015

David Lambie joins TwentyTwo

Well-known and respected property adviser David Lambie has joined TwentyTwo as a Principal and Director.

Read more...

29 July 2015

Take it from the top

A recent issue of boardroom, the IOD’s bi-monthly magazine that keeps members informed of relevant governance and business issues, includes a feature written by Managing Partner Dean Croucher.

Read more...

16 June 2015

New Tenant Briefs page outlines client requirements

A key part of our unique end-to-end process is to intimately understand each property market and ensure our clients have visibility on the the widest range of accommodation and property options.

Read more...

15 June 2015

People aren't your biggest cost – premises are!

A few months ago, I was taken back by a statement made by an industry insider – "people aren't your biggest cost – premises are".

Read more...

04 June 2015

Corenet Auckland Symposium 4

This is the last of my four blogs about the Corenet Auckland Symposium - Location, Location, Location that I attended in June.

Read more...

04 June 2015

Another great new signing!

TwentyTwo is delighted to announce our new 2014-15 season player partnership with Andrew Durante, Captain and No.

Read more...

04 June 2015

TwentyTwo appointed to advise Callaghan Innovation

TwentyTwo has been appointed to undertake a National Property Strategy for Callaghan Innovation.This work will involve some more detailed planning for their Gracefield Site.

Read more...

04 June 2015

TwentyTwo appointed to advise NZQA

TwentyTwo has also been appointed to help NZ Qualifications Authority make better use of their premises in Wellington.

Read more...

04 June 2015

TwentyTwo's workplace makeover

Following our re-brand in 2012, we decided to take some of our own medicine! To align with our strategic intent and values, Duncan and Dean developed a 'brief' in the same way we do with clients.

Read more...

04 June 2015

Phoenix Sponsorship Launch

On 24 September a number of clients joined us to celebrate the start of our sponsorship for the 2014/2015 season with Andrew Durante, Captain of the world famous Wellington Phoenix! Andrew was a real hit and...

Read more...

04 June 2015

Shaping our city skylines: Part One – Wellington

There’s a lot of positive news and activity at the moment across our three major cities, particularly in the commercial property space.

Read more...

04 June 2015

National Property Strategies: Observations from the frontline

We've completed quite a bit of work over the last 18 months helping Government Agencies with their Property Strategies.Together, we've learnt some good things which we've outlined here.

Read more...

04 June 2015

Thanks for your support this year – have a great Christmas

It's been another great year for TwentyTwo with fantastic projects and the start of a promising relationship with Exis Global Tenant Representation.

Read more...

04 June 2015

Office moves for the better

Office moves for the better is an interesting article by the UK's Royal Institute of British Architects (RIBA) on the roles and responsibilities around workplace procurement and design.

Read more...

04 June 2015

Conflicts of interest – a “spreading cancer in corporate real estate”

A robust, well-researched white paper released by Gail Corder Fischer of US tenant representation business Fischer explains how corporate tenants might be “leaving more money than they realise on the table when they place their property portfolios in the hands of large real estate brokerages that serve multiple stakeholders”.

Read more...

04 June 2015

Workplace design and productivity: are they inextricably linked?

In a recent rummage through some old research papers, we unearthed a brilliant paper from the RICS Property in the Economy Series entitled 'Workplace Design and Productivity: Are They Inextricably Linked?'.

Read more...