How to Negotiate Lease Commissions in Commercial Real Estate Brokerage

If you provide specialist leasing services to property investors and landlords, you will need to be well versed in commission negotiations and commission standards. Many of the clients that we work with in commercial property today are quite experienced when it comes to commission and listing negotiations with agents. On that basis you should have some points of difference in your professional services to convince clients that you are the best choice of agent when it comes to solving a vacancy problem.

The message here is that your specialist services should be of substantial quality and complexity to support a fair and reasonable commission payment. Landlords will find easier to use your services and pay the required commission if you can prove that you comprehensively understand and control all of the following:

  • current levels of enquiry with local tenants
  • an understanding of what tenants are looking for in the property market today
  • have a major market share when it comes to leasing local properties
  • successfully transacted a good selection of quality leases in the local area
  • have a database that is up to date when it comes to tenant movement and tenant requirements

Far too many agents think that they need to discount their commission as part of winning the listing. Nothing could be further from the truth; most investors and landlords today understand that the vacancy is costing them a lot more in loss of rents and loss of outgoings, than in any minor saving to be achieved through a discounted commission.  If the landlord pushes for a low commission, they really don’t appreciate the commitment and drive that you can bring to the listing on an exclusive basis; perhaps you haven’t sold your skills sufficiently when compared to other agents.

The landlords that we serve are simply looking for the vacancies be filled professionally, that is with a good tenant at a reasonable market level rent. If you can prove that you are the best agent to satisfy the leasing requirement, then the listing will be easier to convert.

As a general rule, the leasing commissions that we negotiate should be supported by all of the following professional services:

  • Comprehensive market coverage to the targeted tenant market
  • One-on-one contact direct into the business community
  • Online and off-line unique and special marketing initiatives to attract enquiry
  • A good knowledge of exactly what tenants are looking for when it comes to the location and the property type
  • A timely approach to encourage inspections and lease negotiations
  • A good knowledge of lease documentation when it comes to improving the property for the landlord over time
  • A detailed consideration of the special strategies that apply when it comes to incentives, market rents, renovations, and lease documentation

 

So there are plenty of things can be done here when it comes to providing a specialised and professional commercial leasing service. If you can prove that you actually provide all of the points mentioned here, it will not be difficult you to convert more clients and listings as part of the lease marketing process.