What is Dual Representation

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In any business transaction there is an advantage to having as much relevant information as possible. In a real estate transaction, this is often difficult because of potential conflicts of interest.

It used to be simple. A commercial real estate broker represented the individual or firm with whom he or she had a listing agreement. If a broker with several building listings is also representing a tenant in his search for office space, it is very difficult for the broker to be unbiased toward his or her own listings. The broker is representing the building owner and has a fiduciary responsibility to that owner. Thus, in this scenario, the potential tenant is left unrepresented, oftentimes, unknowingly.

Legally, the broker must disclose this relationship to both parties by entering into a role of “dual agent”. As a dual agent, the broker cannot disclose any information, which would put either party at an advantage in the negotiation process. In such cases, neither party, the tenant nor the landlord, are getting the value of the broker’s expertise.

In order to avoid any potential conflicts of interest or mixed loyalties, some brokers act only as tenant agents. The tenant’s best interests are always kept at the forefront, because the broker is not also representing landlords, which could prejudice their loyalty toward their client.

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Timing Your Search for Office Space

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Many of the business people I talk with wonder when they should begin their search for office space. Is a year out too early? Is a month out too late? The answer is typically somewhere in between.

Lease negotiation delays, design, permitting and construction setbacks, are just some of the reasons why it is important to begin your search for office space early. The biggest risk in waiting too long to start your search is that you end up limiting your options.

I recommend the following timing for starting your office search:

Space Size in SF	Timing
1,000 – 2,000	2-3 Months
2,001 – 5,000	3-6 Months
5,001 – 10,000	4-9 Months
10,001 – 15,000	6-10 Months
15,001 – 25,000	8-12 Months
25,001 +	12+ Months

Keep in mind, if you intend to have a facility custom-built, or if you anticipate significant remodeling of an existing location, additional time may be required. Conversely, if you are a small-user and think you might be able to lease space on an as-is basis, you may be able to complete the leasing process in a shorter timeframe.

Most importantly, the less time you leave for your office search, the more you may find yourself compromising. Hiring a commercial real estate broker early and having that broker looking for your ideal space with time to spare will almost always result in financial savings and an office that fits your needs to a T.

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How Much Office Space Does Your Business Really Need?

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Determining how much square footage your business requires is an essential aspect of the office space search process. There are several different methods to calculate this; the simplest is to base your square footage requirement on the number of employees in your office.

Experts estimate that you need 200 to 250 square feet per employee. You may require even more room if you have significant storage needs or if your business requires large amounts of open space. Calculating your square footage needs at both 200 square feet per employee and 250 square feet per employee is an effective way to determine your square footage range.

For example, if your firm has 27 employees: 27 at 200 square feet per person equals 5,400 square feet. Next, multiply 27 by 250 square feet for an answer of 6,750. You now know that your ideal office space will be somewhere in the ranage of 5,400 square feet to 6,750 square feet. Keep in mind, this range gives enough room for the individual employees and adds a buffer for corridors, conference rooms and work areas.

If your business requires the use of additional equipment, or offices that are significantly larger than usual; you will want to increase the amount of square footage for your office space search. Conversely, if you run a call center with that utilizes small cubicles, you may be able to get by with less square footage than is considered typical. Extremely dense call centers can often get by with 150 square feet per employee or even less.

Your commercial real estate broker will be able to uncover available office space in your desired area that is in your size range. When identifying spaces that may be a good fit for you, your broker will also take into account your business culture, your typical work flow, and whether you require private offices or space that is an open work area. It is also important to factor in future growth. If you plan to expand your business in the near future, don’t forget to add the additional space you are planning for up front.

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My Commercial Real Estate Experience

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It’s official, I’ve now been in the commercial real estate business for 15 years. My career began in Indianapolis, Indiana in 1994 when I was hired at a small, boutique tenant representation firm. Learning the business from the tenant side of the lease transaction is certainly one of the best educations available in this industry.

In 2006 I joined the Colliers office in Boise, Idaho.

The most rewarding aspect of my role is that I help businesses find solutions. I really enjoy negotiating and ensuring the best possible outcome—a win-win deal—for all the parties involved.

It’s very satisfying to me to be able to “level the playing field” between landlords and tenants. Landlords do leases every day but tenants only deal with them every 3-5 years, so my role as the tenant’s advocate really makes a difference.

Also, I get to see my clients’ businesses mature and evolve over the years and I enjoy being a part of that growth and success.

People often ask me about the books I’ve written on office leasing and negotiation.

The idea grew out of counseling and working with my own office relocation clients. Early on, my clients asked for advice about which steps to take and what to do next, and I suggested that they consult books or reference articles to get familiar with the process. But it turned out that neither they nor I could find any published material on the subject.

So, I did extensive research to develop my own templates and checklists, then had them printed and bound and gave them to my clients as a courtesy.

Everyone raved about the package, and clients kept telling me, “You should really publish and sell these.” From there, the idea began to take shape as a book and I’ve since written two more. Published titles include:

Move Your Office, 2006

Winning the Office Leasing Game, 2001

Office Relocation Planner, 1997; current edition, 2008

These are the top-selling commercial real estate publications on Amazon.com.

The commercial real estate world is constantly changing and I look forward to what’s in store over the next 15 years.

Please let me know of your experiences with commercial real estate. I’d love to hear from you, submit a comment or send me an email!

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