This post also appears on Matt’s personal blog http://mattgiffune.wordpress.com/.
Tenant representation is perhaps the most competitive arena within the commercial real estate brokerage industry. Real estate companies large and small are all chasing the same group of space occupiers through cold calling, relationship building, networking, entertaining, etc. There is only so much business to go around.
To tenants, brokers tend to all look and sound the same. Even exclusively tenant rep firms must compete with the traditional brokerages that represent landlords. No matter what you call yourself as a broker, you have competition coming from every angle. Tenants are very demanding of their service providers to deliver more solutions for lower cost. It’s a battle out there.
There is a hidden layer of competition for tenant rep brokers – landlords. Yes, landlords compete for tenant rep business. Not in the sense that they actually represent tenants, but they absorb commissions that are otherwise to be earned by brokers who advise tenants on renewals and sometimes new deals.
I’m not suggesting that this is at all wrong or unethical. I represent landlords as well as tenants. It is simply the nature of the business. If a landlord can negotiate a favorable deal without having to pay a broker, it’s in their best interest to do so. As a tenant rep broker, however, you should be aware that the sales path may actually take you through the landlord.