Many times we hear the same claim from tenant only representation firms: You can’t work with a broker that represents both landlords and tenants, it’s an inherent conflict of interest. This is simply not the case, and the point is often presented unfairly to the potential client.
There are many reasons why the statement is simply not true. One of the most glaring is the fact that nearly every “tenant only” firm does in fact represent space. Repeat: they do represent companies looking to dispose of (mostly sublease) space. It may not be representing a prime landlord directly, but in fact they do represent sublandlords.
Many firms that represent both landlords and tenants, or are “full service” operate on trust, ethics and integrity. And, as a current CEO of a national full service firm points out in a recent article in the online industry magazine Globe Street “For starters, any full service company…will not allow a conflict of interest to arise under its roof….for both ethical reasons and practical ones as well”.
He’s right. If a broker is worth their value they will only advise you on choices; not sell you where to go. A broker who is honest and has integrity will not “steer” a client toward a landlord they represent The commercial real estate sector is a small and close community, where most of the major players in the markets know each other or know of each other. Ethics and reputation are critical
As this CEO went on to further, rightfully say “The minute word gets around that we do not give our best to our clients, that we favor landlords over tenants, we lose all creditability in the market.
There are many other reasons why tenant only firms have more limitations that a full service firm. Among these:
- Full service firms like TDKCA have access to information through relationships with landlords. Current financing and debt trends, investment criteria and nuances etc.
- Firms that represent landlords and tenants often have a better understanding of how owners think and value transactions. These brokers interact with landlords from the inside on a daily basis and have a solid, fundamental comprehension of what drives an owners deal making and decision process: experience breeds expertise.
In the end, a client needs to choose a broker based on experience, trust and comfort. Given the ethical responsibilities of a broker, whether one represents both landlord and tenants or only tenants should not be as important as these critical factors: do you have trust, confidence and comfort with the broker of choice. If you do, the great service and relationship will follow.