Who represents you in a commercial lease?
Unless you hire your own broker, usually no one. The broker marketing the space was hired by the landlord. In Oklahoma, that broker owes you honesty and reasonable care. Negotiating the best deal for your business is not their job.
By Tom H. Vaught, SIOR ·
What does the landlord's broker owe me?
Oklahoma's broker relationships law (Title 59, Sections 858-351 to 858-363) sets duties a broker owes to every party: treat them honestly, use reasonable skill and care, present written offers on time, account for money, and keep confidential information confidential. Those are real protections. None of them is a duty to get you lower rent, more free rent, or a limit on your costs.
Can one firm work with both sides?
Yes. Oklahoma law allows a firm to provide services to both parties in the same transaction, with written disclosure. Think of it the way you would a law firm working both sides of an issue: it is a conflict, and it should only happen when both parties know about it and agree to it. Ask whether that is happening in your deal, and what it means for the advice you are getting.
What does it cost to negotiate alone?
You rarely see it, because nobody shows you the deal you did not get. It tends to show up as:
- Rent above what the landlord would have accepted
- Free rent and improvement dollars you never asked for
- Operating expenses with no cap
- Repair obligations with no limit
- A renewal you accepted because you ran out of time
- Options you never saw because they were not listed
What does it look like with someone on your side?
- FlexAbility Concepts was being advised to stay by a broker with an ownership interest in the building. We moved them into off-market space at $4.00/SF on a 15-year lease.
- On Jeff Houpt's lease, we negotiated a cap on his repair costs, and the cap came into play during the term.
- LWPB Architecture moved into Class A space with three months of free rent and a landlord-funded buildout.
Doesn't the landlord pay your commission too?
Usually, yes, and you should know that before we start. In most deals the landlord pays our commission, and commissions are typically based on the value of the lease. We tell you exactly how we are paid before any work begins, so you can weigh our advice with that in view. We have told clients to stay where they are, to take less space, and to use another firm when that was the better answer.
When should I get my own broker?
Before you tour a space, before you answer a renewal letter, and well before your lease's notice deadline. The earlier you start, the more real options you have.
What should I ask any broker?
- Who pays you, and when?
- Do you or a partner have any interest in this property?
- Do you represent the owner of any building you are showing me?
- If the right answer were to stay where I am, would you tell me?
Find out where you stand.
Start with a straightforward conversation. If we are not the right firm for the job, we will tell you.