In tenant advocacy, the real estate agent works for the tenant and has them as the client. This is a deliberate shift from the normal work that a real estate agent will do with a landlord in letting vacant space. Most particularly tenant advocacy is a real and significant service for corporate businesses that require relocating.
In normal circumstances corporate tenants consult with their solicitor to assist them with the lease and relocation process. In real terms, the solicitor will usually know nothing about the property market and only becomes useful when legal documentation is to be prepared.
The tenant advocacy service is therefore a specialised offering for the corporate customer requiring new premises. In this market, as we adjust to a new commercial real estate cycle, the movement of businesses and corporate tenants is becoming more frequent and will remain so for the next couple of years. The corporate real estate customer will be looking to seize the opportunity of new premises at realistically lower rentals. At this point in time, landlords are still under pressure to find tenants in many locations. This produces lower rentals, higher incentives, and tenant favourable lease documentation.
Tenant advocacy, as a specialised service offered by a real estate agent to a tenant, effectively costs the tenant nothing when handled correctly. This is because the real estate agent provides real savings through market intelligence and negotiation skills. The tenant pays for those skills through commissions. They get the expert they require for finding the new premises.
For some property agencies, this is a significant shift in mindset; they would normally work for the landlord. This can also provide difficulty if they work for landlords in a smaller precinct or real estate market. In a larger property market it makes no difference.
If you are in a smaller property market, or are worried about the impact of working for tenants specifically, the best way forward is to appoint a specialised staff member who will focus only on this tenant advocacy market segment and therefore not cross over to the landlord client relationship. Conflict of interest is therefore reduced, although it should be said that the tenant as a client should never be introduced to a property that is listed with your real estate agency from the landlord client relationship.
You can get more detail on Tenant Mix and Tenant Advocacy at our website http://www.commercial-realestate-training.com/