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Businesses looking for new spaces could be making a mistake if they don’t enlist the services of a tenant representation broker, who are tied to the needs of a tenant rather than a property owner or management company.

Tenant reps play a key role in making sure projects, such as changing space or doing a major renovation, go smoothly. While a company might move only every seven or 10 years when a lease is about to expire, tenant reps live in the world on a day-to-day basis and know all the things that can go wrong.

Tenant reps’ roles encompass selecting vendors to work on projects, managing them, communicating, keeping projects on schedule and staying as close to the budget as possible.

SFBW assembled six tenant reps at the offices of JC White, a commercial interior design and architectural interior products provider in Miramar. JC White works closely with tenant reps to help supply the right type of furnishings and ensure the space is properly used.

Panelists talked about the advantage of bringing the tenant reps into projects early on.

Maureen Mascaro, owner of Common Area Factor Project Management Services, says the process goes well beyond what office view a client might want.  “What are the building environments that we need to deal with when we’re moving into that space, and what are going to be our challenges with schedule, and what is our budget going to be?”

A tenant rep will help negotiate a work order with the landlord to outline terms that best favor the tenant. There’s a lot going on behind the scenes, she said. “We’re problem solvers, and problem preventers, mostly problem preventers.”

Project management experts help avoid the type of chaos that can ensue if clients rely on their own offices to manage a project, she said. “A lot of times they don’t know what they’re getting into, or a lot of times they have part of their team has been through this process before and they’re trying to influence decision-making, but they don’t quite have a grasp on the industry today.”

Sharpe said tenant representations are like a fiduciary with the best interests of the tenant at stake, such as seeking a higher allowance for buildouts, while brokers in general might represent the best interests of a landlord. Owners’ reps also help save money on projects by avoiding delays and change orders.

Alex Brown, executive director of office services for Colliers International, said the cost of interior buildings have climbed sharply in recent years. Landlords’ agents typically start low on how much they will offer to pay for improvements. “Then you got to beat him up to get up to where you want to be.”

Beyond managing team members, tenant reps also oversee government approvals and organizing the furniture, pictures, equipment, security, cabling and telecommunications.

“So, the bricks and sticks is what people focus on, but the bricks and sticks can get done and you can’t move in,” he said. For example, a tenant might order furniture, but then the electrical outlets or telecom ports might not be in the right place if there’s a lack of coordination with the architect.

“Everyone wants the end product, but getting there is kind of key,” Brown said. A tenant rep can start at the beginning and outline all the steps that are needed, acting as a fiduciary to meet clients’ needs.

One positive is that tenant reps are compensated as part of the lease or purchase transaction, Brown said. “So if we’re buying a building for a tenant, typically the seller will pay our fee. If we are leasing space for a tenant, the landlord pays our fee.”

Scott Allen, senior managing director for Tower Commercial Real Estate, said undertaking a project without a tenant rep when the landlord has a broker is like going to court without an attorney to represent you. There are a lot of steps in projects that can be complicated and expensive. If you don’t pay attention to them, things can get out of hand quickly, including project timing.

“One of the, I think, most important parts of our platform, or what we can present to our clients is the cost consultancy aspect of it, allowing them to understand transparently, first, what things cost in the market versus what they’re being charged,” he said. Allen used the analogy of a buyer wanting a Mercedes Benz but not really having the budget for it, which a tenant rep can help them understand.

Liz Melendez, director of project management at the Miami office of CBRE, said single clients with one project also don’t have the market leverage or pull that a tenant rep might have.

“We’re not just doing one project. We’re doing many projects. We’re representing clients across the board, so we can bring that added value that the client would not get. And that’s an immediate savings, in many ways, for [the] client in schedule and in actual money.”

Mark Feltingoff, CEO of panel host JC White, said he learned a lesson the hard way when his company went through a major renovation.

“Being inside of the furniture and modular wall business, we figured this was nothing—we’d hire an architect in a design firm. And the one mistake we made here was, we did not hire a third-party tenant rep, and we were probably four months off on schedule and $200,000 over budget. It sort of was a learning lesson for us of what the value that this team really brings to the table. And anybody that comes into our showroom now, we hope that they have the right trusted advisers, because with the cost of doing business, with all the upfront work that we have to do, if they have a professional team of advisers, it makes the process seamless for us.”

When asked about the role of technology in their field, Mascaro mentioned JC White’s virtual reality system. In a subsequent demonstration with virtual goggles, a user could virtually walk through a space. With a click, different furnishings and treatments could be shown.

“C-suite executives, they’re highly intelligent, they’re well educated, and they’re experienced, but they can’t visualize a flat piece of paper into the space that they’re going to live and breathe in. So virtual reality on the architect side has come up a lot,” Mascaro said.

Mountable wall systems actually having, plumbing, electric and cables built in, can speed up projects by eliminating wall framing or drywall and painting.

Allen said technology is providing a vast amount of information about trends and options in the market, but he doesn’t think it provides the insights of professionals who are living and breathing in the market on a day-to-day basis.

Sharpe said he is working with a technology company to better communicate information not only as the transaction is happening, but as the project continues to develop and morph.

“This is a system which would communicate to the property manager, the leasing agent, the asset managers and your tenants concurrently,” he said. The method is designed to avoid emails, switching files and transferring information, which can lead to distortions and miscommunications.

Melendez said CBRE has also invested in a platform that improves communication.

“It’s an app-based solution, which they can have on their phones or on their tablets. And they can see live what our project managers have in terms of information. So, you get to see a dashboard of where your schedule stands on that day, where your budget stands on that day, what invoices are open, what tasks are critical, etc.,” she said. The system is especially helpful to clients who may have multiple projects in different cities.

Preston said he recently finished a major project in northern Palm Beach County that includes smart-building technology integration. Someone can go through a guard gate and the lights are turned on in their office and an elevator comes down to meet them.

“It knows your routine, and it changes and evolves over time,” he said. ♦

The panelists

• Liz Melendez, director of project management at the Miami office of CBRE. She leads all local project management and business strategy. While CBRE is one of the largest real estate brokerage companies, Melendez says it also has one of the largest teams of projection management nationally, including its Global Workspace Solutions division. Its expertise include design capabilities.

• Orlando Sharpe, president of Sharpe Project Developments in Fort Lauderdale. His 10-person firm is an owner’s rep and development management firm. Member of his firm include architects, engineers and contractors who still carry licenses but don’t practice. The firm encompasses tenant improvements, ground-up projects and build-to-suit.

• Alex Brown, executive director of office services for Colliers International. Collier is the third-largest full-service global commercial real estate firm with 17,000 professionals. Sixty of them are focused on pure tenant representation, which is what Brown has been doing for 20 years in South Florida.

• Matthew Preston, senior manager of projects for  JLL. For the past five years, Preston has worked with the project development services team in South Florida. JLL is the second-largest firm internationally for projects and development services.

• Scott Allen, senior managing director for Tower Commercial Real Estate. Allen has been in the corporate-related real estate industry for more than 20 years and leads Tower’s tenant representation division. Tower has four South Florida offices

• Maureen Mascaro, CRE consultant, chief project officer and owner for Common Area Factor Project Management Services, an independent advisory services firm. Mascaro has eight years’ experience in the real estate industry, managing the design and construction of commercial office, health care, higher education, industrial, restaurant and residential projects. She specializes in project team selection and management.