Ryan Maddock of Maddocks Accounting & Advisory took some time to chat with Kelly Cunningham from Your Leasing Co, a well known commercial property Tenant Representation firm, known for getting amazing results for their clients and put some direct questions to her that all Tenants want to ask.
Q: Ok, let me get straight to the question we all want to ask… How much money do you typically save your clients?
A: Thanks Ryan, straight to the heart of it. Our current average saving is $102,000 per client over the length of the lease term. This result varies client to client for a number of reasons, such as the length of time a tenancy has been occupied, the amount of rent being paid and the length of lease being entered into to name a few….
Q: What is the most you have saved a client?
A: Our biggest saving for a client was just over $2m. In the last 24 months, we have saved just under $6.5million for our clients, which we are incredibly proud of.
Q: What does a Tenant Rep’ actually do?
A: We specialise in representing commercial tenants in negotiating their leases on their behalf, with the sole objective of getting them the best deal we can, which results in us saving them a heap of money as well as making sure that all of the fine print clauses within the lease are in the best interests of our clients.
Q: Is this a complicated process?
A: It’s like most things, we are all good at what we specialise in. We have been doing this work for 25 years and completed over 1,000 deals. We have a set 12 point list that we negotiate every time. Most business owners just focus on the rent, which is important, as it is often one of the top three biggest business expenses. These 12 key points result in savings and benefits in a number of areas.
Q: Why do most Tenants end up with a raw deal?
A: It is important to remember, that Landlords are typically the much stronger party in a negotiation. They employ expert property specialists as their agent, they have access to all the current market data, it’s their lease document and they have more than likely negotiated hundreds more leasing deals than the Tenant they are up against. We call this “The Tenants Dilemma”.
Using a firm like ours, eliminates that Landlord power imbalance.
Q: Where do you start when helping a Tenant?
A: Landlords are always looking for growth in their investment, so will always seek an increased rent, however, this doesn’t necessarily reflect the market conditions at the time. Landlords increase rent annually by 3%, 4% or 5%, which often takes it out of line with the market. Over 5 years at 5% increases, the rent will have increased by 28% compounded. Most business owners profit probably hasn’t increased at the same rate.
- We review the lease from the Tenants perspective.
- We determine an opinion on the market rent for the tenancy. We have access to the same information that the Landlords do, so we use that information, as well our market contacts, look at recent leasings, space on the market as well as off market opportunities to form an opinion on the market rent. We can then compare that to the asking position of the Landlord and set about negotiating with them, based on our evidence.
- We go through all of the 12 key points and make recommendations on how we would like to respond to the Landlords offer on each one, maximising the Tenants position
- We then continue the conversation with the Landlord, aiming to get as much of the offer agreed or close as possible.
- We handle all of the uncomfortable conversations, we handle all of the Landlords objections and negotiate through the whole process, until we have reached the best possible position agreed.
Q: What is the process for a Tenant to work with you?
A: It’s a pretty simple process.
- We will obviously send through some paperwork to complete, which will outline the whole process and what you can expect, while outlining the associated costs.
- Then we gather some information, such as the current lease, current rent, size of the tenancy etc, as well as the contact details for the Landlord or their agent.
- Then we will have a conversation to confirm
- What the Tenant wants to get out of the new Lease.
- What are the plans for the future?
- What is the age and stage of the business?
- Once we know all of that, we will ask to be introduced to the Landlord, so that they know we have authority to act on their behalf.
- Then we will get stuck straight in, determining the market rent and negotiating with the Landlord. We will handle everything, from end to end!
We will look after the entire leasing process, keeping the Tenant informed along the way.
Thank you Kelly for your candid feedback. It was really interesting chatting to Kelly about how she adds value to her clients in a very specialised professional service to Tenants. I think she could help anyone getting a better outcome negotiating with their Landlord! If you have a lease renewal coming up or are looking at a new location and need help negotiating the deal, call
Your Leasing Co, speak to Kelly or one of the team to get a no obligation assessment of your leasing situation.
Interview conducted by
Ryan Maddock, Partner
Maddocks Accounting & Advisory