© 2024 Real Estate Consultants of Colorado, LLC
Austin, TX
Yesterday, we received a call from the COO of a long-time client, a tech company (we will call them TC) that REC represented for their first and second office leases in RiNo as TC went through funding rounds and outgrew their past offices. TC has been in its current office for nearly three years now and their team has grown so that the CEO is no longer taking care of things like office leasing. Last year, TC's president recommended his friend - a commercial real estate broker at a full service firm (we will call him FS) - to the COO for TC's additional office needs. The COO was not at the company when REC had represented TC for their past office leasing negotiations and the CEO was unaware of the president's conversation with the COO about brokers, so TC started working with FS for their office search. It turns out FS represents TC's next door neighbor who had listed their office for sublease. FS then presented a lease proposal for the sublease to TC at a 20% premium over what the neighbor was paying - when subleases are commonly offered at a discount these days given the pandemic's negative effect on the office market. FS then suggested office space at a nearby building where FS represents the landlord. FS advised TC that there was little negotiation to achieve at this building. Meanwhile, a 45,000 square foot tenant was leaving the building early and office vacancy rates in Denver are soaring, driving sublease prices down significantly. At this time, the CEO heard that the COO was working with FS and contacted REC.
We explained that FS was not operating in TC's best interest. They were actually operating for the [sub]landlord's best interest in both scenarios, yet they led TC to believe they were working for TC. We explained to the COO that REC's approach eliminates this scenario entirely because:
At REC, we represent buyers and tenants only. We do not represent sellers or landlords.
At REC, there is no steering of a tenant towards one of our listings because we don't take listings.
At REC, our sole purpose is to find the real estate our buyers and tenants want to acquire, to negotiate the best possible terms on their behalf, and to make sure their best interests are promoted throughout the process with no conflicts of interest ever.
At REC, we have a fiduciary duty to buyers and tenants and there is no question of where our loyalties lie.
Yesterday, we received a call from the COO of a long-time client, a tech company (we will call them TC) that REC represented for their first and second office leases in RiNo as TC went through funding rounds and outgrew their past offices. TC has been in its current office for nearly three years now and their team has grown so that the CEO is no longer taking care of things like office leasing. Last year, TC's president recommended his friend - a commercial real estate broker at a full service firm (we will call him FS) - to the COO for TC's additional office needs. The COO was not at the company when REC had represented TC for their past office leasing negotiations and the CEO was unaware of the president's conversation with the COO about brokers, so TC started working with FS for their office search. It turns out FS represents TC's next door neighbor who had listed their office for sublease. FS then presented a lease proposal for the sublease to TC at a 20% premium over what the neighbor was paying - when subleases are commonly offered at a discount these days given the pandemic's negative effect on the office market. FS then suggested office space at a nearby building where FS represents the landlord. FS advised TC that there was little negotiation to achieve at this building. Meanwhile, a 45,000 square foot tenant was leaving the building early and office vacancy rates in Denver are soaring, driving sublease prices down significantly. At this time, the CEO heard that the COO was working with FS and contacted REC.
We explained that FS was not operating in TC's best interest. They were actually operating for the [sub]landlord's best interest in both scenarios, yet they led TC to believe they were working for TC. We explained to the COO that REC's approach eliminates this scenario entirely because:
At REC, we represent buyers and tenants only. We do not represent sellers or landlords.
At REC, there is no steering of a tenant towards one of our listings because we don't take listings.
At REC, our sole purpose is to find the real estate our buyers and tenants want to acquire, to negotiate the best possible terms on their behalf, and to make sure their best interests are promoted throughout the process with no conflicts of interest ever.
At REC, we have a fiduciary duty to buyers and tenants and there is no question of where our loyalties lie.
© 2019 Real Estate Consultants of Colorado, LLC