Who the listing broker works for
The name on the sign works for the landlord. Their job is to lease the space at the best terms for the owner. That is not a criticism, it is the job. If you call the number on the sign, nobody in the deal is negotiating for you.
What a tenant rep broker does
- Finds every space that fits, including ones not on listing sites
- Tours with you and compares the real monthly cost of each, including NNN charges
- Negotiates rent, free rent, tenant improvement allowance, the personal guaranty and renewal options
- Reviews the lease terms that cost money later, like operating expense caps and restoration clauses
- Keeps your deadlines, from LOI to move in
Who pays
In most Colorado commercial leases the landlord pays a commission when the lease is signed, and it is shared between the listing broker and the tenant broker. The rent is the same whether you have a broker or not, because the landlord has already budgeted for both sides.
Get your broker's fee and who pays it in writing before you tour.
When it matters most
You should hire one
- Your first lease, or your first in years
- A lease over 3 years or over a few thousand square feet
- You need a build out or an improvement allowance
- You want to compare renewing against moving
You could skip it
- A short term, small space with no improvements
- You have negotiated many commercial leases yourself
What to ask a tenant broker
- How many leases like mine have you done in the last two years?
- Will you show me spaces from every landlord, not just certain ones?
- How are you paid if the landlord will not pay a commission?
Common follow up questions
Will my rent be higher if I use a tenant broker?
No. The landlord sets the commission in its listing agreement, and it is paid whether or not you bring a broker. Without one, the listing broker usually keeps the whole fee.
Can I use a tenant broker if I already found a space?
Yes. Bring them in before you sign an LOI. They can still negotiate the terms, and the landlord will usually still pay them.
What if the landlord will not pay a tenant broker?
It happens with some smaller landlords. Agree in writing up front how your broker is paid in that case, so there are no surprises.
This page is general information, not lending, legal or tax advice. Programs, limits and terms change, and every situation is different. Talk with your lender, attorney and CPA before you decide.