Should I use a broker to negotiate the takeover of my lessor’s space?
I currently sublease a commercial space from a lessor who’s initial term is up 1.5 years. They do not wish to renew, but I’m interested in taking over the entire space. Should I hire a broker to help with negotiation or just deal with the landlord directly? I’m a CRE novice but have a pretty good attorney who helped with the initial sublease agreement. I also have a copy of the master lease agreement so I am familiar with TI and concessions that were given to my landlord when they signed the initial term. Any advice is appreciated.
[{"id": "itt1yu5", "text": "Hire a broker. The landlord pays the brokers commission so it will not cost you.", "replies": [{"id": "itt2zoc", "text": "Would not having a broker fee encourage the landlord to give me a better deal?", "replies": [{"id": "itt46xm", "text": "It\u2019s possible. But a (good) broker will know the market well and would negotiate the best possible deal on your behalf (or even tell you what else is out there, if a potential relocation is in the cards for you). \n\nSo while there\u2019s a possibility you could convince the LL to reduce the asking rent slightly bc you don\u2019t have a broker, I think there is a better chance you would save money by hiring a broker who knows the market and can negotiate a good concession package. Just my two cents.", "replies": [{"id": "ittdosi", "text": "Makes sense. Ty.", "replies": [{"id": "itukw47", "text": "Just wanted to reinforce the above point. A good and experienced broker will help you get the best deal. Not random friend\u2019s friends dad from book club  that got them a great deal on their house. Brokers are not made the same. \n\nAs landlord - I will routinely and easily get higher than market deals from un-represented or deals where the \u201cbroker\u201d is not experienced in your office type.", "replies": [], "depth": 5}], "depth": 4}], "depth": 3}, {"id": "itwkxwg", "text": "The landlord is in the business of making money so it's very unlikely that they'll give you a better deal, especially if it's a public company. The Landlord DM's have a fiduciary responsibility to maximize profit for its shareholders. A good broker will also help review your lease and pick out areas of improvement. Don't let them personally modify the lease, as that could be considered practicing law.", "replies": [], "depth": 3}, {"id": "itwosvl", "text": "Since you are a known quantity to the landlord, yes you will get a better deal.\n\nYou should hire a broker to help you find other suitable places in your area to make sure that you are getting a decent deal.  If you aren't then it makes sense to move.", "replies": [], "depth": 3}, {"id": "iu0r6m0", "text": "In theory but they\u2019d probably screw your elsewhere (restoration language, low/no TIs, etc)", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "itu2l5h", "text": "Attorneys kill deals. They rarely ever help. Hire a broker, it costs you nothing. Everything you stated is cool but the original lease and the agreed upon TI and  concessions were not negotiated w you so I\u2019m not sure they help you any. There\u2019s like 3 or 4 different pathways for you right now and you see like only 1 of them", "replies": [{"id": "itul50n", "text": "Broker to negotiate the economic terms up to the LOI, then lawyer to negotiate the actual lease document. I wouldn\u2019t recommend your broker negotiate the lease document.", "replies": [], "depth": 2}], "depth": 1}, {"id": "itu84ew", "text": "Definitely hire a broker. As discussed, the brokers fee is already baked into the deal and they\u2019re likely to get you the deal cheaper and with additional inducements", "replies": [], "depth": 1}, {"id": "ituiq7m", "text": "Guess it depends on how big your space is. If it is 500 sf you may have no leverage so may not be much help, but knowing where rates are can give you options. \n\nThere is no downside and only upside. \n\nNot having a broker is like trying to represent yourself at court.", "replies": [], "depth": 1}, {"id": "itw32as", "text": "I'd talk to the landlord without a broker first.  Don't mention whether or not you have a broker butif they ask if you have one say you plan to get one if that's your plan (no need to lie).  People here are saying that \"landlord pays commission\" but there is no listing broker or listing agreement active right now that you have mentioned so that's not necessarily the case.  My firm would add the tenant brokers commission to the lease rate in this scenario most of the time.\n\nHowever, a broker could provide good guidance on the market and your deal in particular so it depends on your own knowledge experience and relationships.  If you have friends who are brokers they might be able to give you the rundown in a few minutes for free.", "replies": [{"id": "ityd5ue", "text": "Thanks for the advice. I have a good idea of what else is on the market. And staying in my current location offers the path of least resistance. I\u2019d be happy with a comparable package to what my lessor received when they signed the initial term so I was thinking of using that as a starting point.", "replies": [], "depth": 2}], "depth": 1}]