In today’s global economy, it is more
important than ever that companies’
real estate needs are met, whether it is a small company in one building or a
global corporation with hundreds or
even thousands of locations. More and
more real estate companies offer teams
assembled specifically to help tenants
throughout the entire real estate process
rather than always representing building
owners.
“We represent hundreds of clients
through our global tenant representation
team, which we call TAG, or Tenant
Advisory Group,” says Randall Book,
senior vice president of Grubb & Ellis
Co. in Southfield, Mich. “It’s a huge asset
for a client to have a real estate partner
with the local expertise and a global
reach capable of supporting their overall
strategy in nearly every market.”
Smart Business talked to Book about
what makes up a good national tenant
representation team and what kinds of
companies should be using one.
Why the need for such a team?
As technology opened the world up to
international business on a widespread
level, the need grew for tenant representation capable of supporting corporations at
the local, regional, national and international levels.
As a member of Grubb & Ellis’ Tenant
Advisory Group, I represent the client as
opposed to representing a seller or landlord trying to fill space. I focus 90 percent
of my energies into working with tenants
by helping them find space or acquire land,
negotiate leases and sales, determine a
client’s layout needs, and ultimately save
money and time on the project. The Grubb
& Ellis team here in Detroit can also manage moves, build-to-suit projects and provide value engineering services that often
save 30 percent or more of the total cost
for the client. We pay for ourselves, essentially, if not more.
What does a good tenant representation
team do for its clients?
There are five phases that we follow that
make up our proven tenant representation
process. Phase one is strategy assessment.
This means we seek to understand exactly
how many locations the client has and how
they can potentially standardize moving
their operations forward. In many
instances, a client may have five offices but
only needs two or three, or they may be
growing and need 10 more locations.
Phase one allows us to re-evaluate everything for the client, including how they use
the space they have and how many people
are in each division. Is it necessary to have
all of these people in the same expensive
space, or can they move the employees
who don’t interface with customers to less
expensive space? Maybe they need a higher image, and therefore need more upscale
space. It’s important to determine what
kind of space the client needs to be in physically because it affects their bottom line.
We learn where the client is growing and
where the business may be shrinking.
Phase two is market assessment. Once
we understand what the client is looking
for, we determine which market is best. Is
it Detroit or Chicago, or California or New
York? Then we can engage the states and
municipalities to compete for the client’s
business, and we do that for several reasons. One, we like to find out what is happening in each region economically. Also,
in the competitive world we have today, we
like to go to the states and say, ‘Hey, our
client is bringing in 3,000 jobs. What can
you provide for our client?’
The third phase is lease negotiation and
execution. That’s basically reviewing the
different deals and finding the best economic situation for the client. We typically
have two or three different properties in
each area we’re looking to compare. Say
we’re working in Detroit; we’ll go out and
find the best three candidates and then
negotiate with them to try and get the best
deal.
We also look at the different floor plans
— maybe we can put 200 people in one
15,000-square-foot building, or maybe the
client needs 20,000 square feet. If an expert
is required to change the space, we can
deliver. We have partnerships with best-in-class architects, engineers, contractors and
furniture suppliers.
Phase four is construction and move-in.
Most of the time, we use our own project
management team. They will go in and represent the tenant, confirming that the
money is being spent wisely and that the
client’s needs are being met as agreed by
the landlord. We also educate our clients
on use of telephones, computers and other
building systems.
Phase five is essentially management of
the account. Six months after move-in,
maybe the client already needs more space
or discovers that there is more space than
needed.
RANDALL BOOK is senior vice president at Grubb & Ellis Co. Reach him at (248) 357-6589 or [email protected].