Tenant Representation

Tenant Representation is a term to describe the fiduciary relationship of a real estate agent or broker with its client in procuring space.  In Tenant Representation, an agent concentrates solely on the requirements of the tenant or user in identifying space to lease.  Most commercial real estate firms represent landlords and tenants, which produces a dual agency relationship.  While often representing both parties, the leasing agent is engaged and paid by the building owner to represent the landlord’s interest. 

When searching for space, a tenant/user must be confident that its representative is placing their interest above the landlord's.  Even though disclosed to all parties, dual agency may create a conflict of interest.  While a landlord is well versed in the leasing process and current market conditions, a tenant may search for space every three to five years.  A tenant representative, familiar with market trends, financial terms, negotiation techniques and knowledgeable with lease documentation, provides the user an invaluable resource. 

The fee for tenant representation is paid by the landlord in the leasing commission.  If not split with the tenant representative, the landlord’s agent will receive the full commission.  On rare occasions, it may be necessary for the tenant to pay the fee.  In order to get the best terms, a tenant should ensure an agent is working for them to find the most favorable deal.