In today’s global economy, it is more important than ever that companies’ real estate needs are met, whether it is a small company in one building or a global corporation with hundreds or even thousands of locations. More and more real estate companies offer teams assembled specifically to help tenants throughout the entire real estate process rather than always representing building owners.
“We represent hundreds of clients through our global tenant representation team, which we call TAG, or Tenant Advisory Group,” says Randall Book, senior vice president of Grubb & Ellis Co. in Southfield, Mich. “It’s a huge asset for a client to have a real estate partner with the local expertise and a global reach capable of supporting their overall strategy in nearly every market.”
Smart Business talked to Book about what makes up a good national tenant representation team and what kinds of companies should be using one.
Why the need for such a team?
As technology opened the world up to international business on a widespread level, the need grew for tenant representation capable of supporting corporations at the local, regional, national and international levels.
As a member of Grubb & Ellis’ Tenant Advisory Group, I represent the client as opposed to representing a seller or landlord trying to fill space. I focus 90 percent of my energies into working with tenants by helping them find space or acquire land, negotiate leases and sales, determine a client’s layout needs, and ultimately save money and time on the project. The Grubb & Ellis team here in Detroit can also manage moves, build-to-suit projects and provide value engineering services that often save 30 percent or more of the total cost for the client. We pay for ourselves, essentially, if not more.
What does a good tenant representation team do for its clients?
There are five phases that we follow that make up our proven tenant representation process. Phase one is strategy assessment. This means we seek to understand exactly how many locations the client has and how they can potentially standardize moving their operations forward. In many instances, a client may have five offices but only needs two or three, or they may be growing and need 10 more locations. Phase one allows us to re-evaluate everything for the client, including how they use the space they have and how many people are in each division. Is it necessary to have all of these people in the same expensive space, or can they move the employees who don’t interface with customers to less expensive space? Maybe they need a higher image, and therefore need more upscale space. It’s important to determine what kind of space the client needs to be in physically because it affects their bottom line. We learn where the client is growing and where the business may be shrinking.
Phase two is market assessment. Once we understand what the client is looking for, we determine which market is best. Is it Detroit or Chicago, or California or New York? Then we can engage the states and municipalities to compete for the client’s business, and we do that for several reasons. One, we like to find out what is happening in each region economically. Also, in the competitive world we have today, we like to go to the states and say, ‘Hey, our client is bringing in 3,000 jobs. What can you provide for our client?’
The third phase is lease negotiation and execution. That’s basically reviewing the different deals and finding the best economic situation for the client. We typically have two or three different properties in each area we’re looking to compare. Say we’re working in Detroit; we’ll go out and find the best three candidates and then negotiate with them to try and get the best deal.
We also look at the different floor plans maybe we can put 200 people in one 15,000-square-foot building, or maybe the client needs 20,000 square feet. If an expert is required to change the space, we can deliver. We have partnerships with best-in-class architects, engineers, contractors and furniture suppliers.
Phase four is construction and move-in. Most of the time, we use our own project management team. They will go in and represent the tenant, confirming that the money is being spent wisely and that the client’s needs are being met as agreed by the landlord. We also educate our clients on use of telephones, computers and other building systems.
Phase five is essentially management of the account. Six months after move-in, maybe the client already needs more space or discovers that there is more space than needed.
RANDALL BOOK is senior vice president at Grubb & Ellis Co. Reach him at (248) 357-6589 or email@example.com.