What is retail tenant representation all about? At a high level, the job description is simple: Find great real estate for your clients, push for favorable lease terms—and seal the deal.
And yet that broad overview doesn’t actually capture the nuance and complexity involved in professional tenant representation. Tenant rep brokers wear many hats. Even some commercial real estate pros may not be fully aware of just how much we do in a given day.
Here’s an overview of some of those diverse roles, with a word or two about the art and science required to fulfill them with maximum effectiveness.
A truism in commercial real estate is that it is a relationship-based business. In the case of tenant rep brokers, that means much more than a firm handshake and an exchange of business cards. Typically, by the time a site is approved by the real estate committee and cemented in the form of a signed lease, the broker and real estate manager will have spent many hours together—from the initial site visit, to follow-up tours with operations personnel and various higher-ups from that retail company.
At dinner or on the drive to the hotel, the conversation may turn to how Equity Retail Brokers can solve business challenges related to site locations, deal terms or letters of intent. But not uncommonly, the talk turns to other aspects of life as well—everything from lighthearted banter about hobbies, sports and the weather, to weightier discussions involving personal tragedies, relationship challenges or questions of meaning and philosophy.
A true friend asks how you’re doing and sticks around for the response. At Equity Retail Brokers, we love building meaningful, lasting relationships with our clients and colleagues. It’s a process that requires honest and open communication. Sometimes, we’re the ones on the receiving end of constructive advice. At other times, we’re the counselor and friend, sharing what has worked for us in our careers, families or life in general.
‘Read the Room’: Psychology and Empathy as Hallmarks of Good Tenant Representation
It’s common knowledge that tenant rep brokers leverage their negotiation skills to help their clients do things like:
- roll out new stores in promising markets;
- downsize, enlarge or relocate existing locations; or
- seek more favorable lease terms.
But there are some misconceptions about commercial real estate brokers, too. One of them is that the more hard-charging and “type A” you are, the better your results will be. While it’s true that competitiveness is a common trait among retail tenant reps, it’s important to remember that those brokers who favor a “scorched earth” negotiating strategy—beating up the party on the other side of the table to get the last dime no matter the costs—fizzle out very quickly. By contrast, when you can achieve deal terms that benefit your client but also satisfy the landlord, you’ll do other deals together in the future.
Achieving that balance requires sensitivity—keen observation of human behavior and emotion. Good tenant rep brokers “read the room.” They want to understand both the person for whom they are negotiating as well as the party on the other side of the table. Importantly, they also know to pay close attention to the perspectives and inclinations of real estate managers’ bosses and other key stakeholders.
By all means, use text messages and emails to save time. But as we routinely emphasize to our younger brokers—so called “digital natives” who live and breathe tech—having the ability to read very human signals makes all the difference. Get on the phone so that you can hear the tone of voice—the happiness or frustration—of that party on the other end of the line. Whenever possible, put yourself in the position to be able to read body language and facial expressions.
Even within the same retail company, two different real estate managers will each have different priorities with respect to something like negotiating a letter of intent. To understand their comfort level with different approaches, you need to see the world through their eyes. A good tenant rep broker understands that often the most powerful person in the room isn’t the one doing the most talking—it’s that calm presence who knows to ask open-ended questions, sit back, listen and observe.
‘Professional Organizers’: Good Tenant Reps Set the Pace—By Staying on Top of the Schedule
In the wake of the Great Financial Crisis of 2008, retail companies went “lean and mean.” As consumer behavior shifted and ecommerce imperatives became more acute, many chains opted to continue operating with those recessionary staffing levels. The goal was to achieve more with fewer people.
The net effect is that retail real estate decision-makers tend to be incredibly busy. Good tenant representatives understand this. They see part of their role as helping everyone stay focused and on task. But here, too, pushing too hard can be counterproductive: Good brokers know how to keep the deal-making process moving along while simultaneously understanding and respecting all parties’ competing constraints.
‘Eyes and Ears in the Sky’: Looking out for Tenants by Tracking Trends and Other Conditions
Veteran tenant reps know that a great many variables, small and large, combine to create a critically important “big picture” for their retail clients. It’s not enough to just focus on what’s on the schedule for today. You need to stay apprised of all the deals in the pipeline and ask probing questions about where they stand. Are the negotiators working well together? How about the engineers on both sides of the table? If there are rumblings from either the landlord or tenant office, how can those be addressed proactively? What’s going on in areas such as financing, approvals, zoning variances? Myopic brokers fall down on these fronts. As a result, they tend to get repeatedly waylaid by unexpected “surprises” that delay deals. What’s a good sign of a rep who understands the big-picture imperative? You’ll hear them say things like, “Here’s an emerging situation that we need to deal with now before it becomes a problem.”
‘Walking GPS’: Tenant Rep Brokers Know the Territory—Literally
When a retail executive comes into town for a site visit, taking Uber or Lyft to the hotel is certainly an option. However, tenant reps who understand the importance of client relationships tend to act as drivers, too. They’ll pick up that real estate manager and operations chief from the Philadelphia airport, let’s say, and then drive them to the hotel in Plymouth Meeting. Rarely will you hear a tenant rep broker say, “OK, I’ll pick you up tomorrow morning and then we’ll start our tour.” Providing transportation is just another way to deepen that relationship with the client (and talk some strategy, too).
Good tenant rep brokers also know the physical layout and nuances of the markets and submarkets in which they work, from the top-performing shopping centers to the sites with the best visibility, ingress/egress and other make-or-break physical criteria. Half-jokingly, one of our veteran tenant rep brokers put it this way: “You’ve got to know the color of the dumpsters behind the Party City in Mechanicsburg just as well as you know the traffic count on Route 42 in South Jersey.”
Many Hats—But a Simple and Straightforward Goal Believe it or not, you could make a strong argument for many other “hats” involved in professional tenant representation, such as personal brand consultant (making real estate managers look great for their bosses by steering them toward the best sites); technologist (making use of tools like anonymous, always-on cellphone signals that give retailers amazing data); and researcher (running demographic reports, tracking macro trends, quizzing outside experts and more).
Broadly speaking, though, all of this is in service of a relatively simple vision and goal: seeing tenant representation as a partnership. At Equity Retail Brokers, our top priority is to provide all of our clients with the same high-touch, results-oriented service over the long term. We’ll leverage every inner and outer resource—and wear whatever hats are necessary—to achieve our clients’ goals.