1.) How are commercial real estate professionals (brokers) paid for their services?
Commercial real estate agents are paid a commission upon the signing of the lease between the owner and a tenant. The amount of the commission is most often calculated as a percentage of the lease value, which usually ranges between four and six percent. The owner of the leased building pays the broker’s commission.
3.) What is a CCIM?
CCIM stands for Certified Commercial Investment Member. CCIM designees are recognized as leading experts in commercial investment real estate. Above all, the CCIM designation represents proven expertise in financial, market, and investment analysis, in addition to negotiation.
7.) What is the difference between a listing agent and a tenant representative?
A listing agent represents the best interest of the owner of the property. It is the listing agent’s job to find a tenant to lease the property on behalf of the owner. The listing agent should use their market knowledge to get the best deal done for the owner. A tenant representative represents the tenant looking for space and has their best interest in mind. It is the tenant representative’s job to find an appropriate property based on the Tenant’s needs. The tenant representative should use its market knowledge and other tools to get the best deal and property for their client. Some agents will work solely as the listing agent while others focus solely on representing tenant’s. On the rare occasion you can have a broker representing both the landlord and tenant on the deal.
8.) What is a typical commercial lease term?
Most commercial leases are structured over a 3 or 5-year term. However, there can be advantages and disadvantages to negotiating a term for more, or less, than what’s customary. A tenant who may be able to commit to a lease term longer than five years may find landlords willing to negotiate things like free rent or a larger tenant improvement allowance. Tenants who are only willing to commit to a one or two-year lease term may find landlords less motivated to negotiate flexible terms, concessions in rent or willing to make needed alterations to the space. The market conditions will also play an important role in who (landlord or tenant) may have favorable leverage while negotiating term as part of a proposed occupancy arrangement as existing supply and demand of space may dictate whether or not a landlord feels compelled to entertain leasing arrangements that are accompanied by tenant stipulations. The owner of the building will also be a key component to term flexibility as each owner will have a different appetite for filling their vacancy alongside some of the aforementioned factors.