Office lease negotiations are complex, and tenants who lack strong representation are often at a serious disadvantage—they don’t know what they don’t know. One key area where this shows up is the tenant improvement allowance (TIA).
TenantSee Weekly: Subleasing Office Space - What Tenants Need to Know
TenantSee Weekly: The Exclusive Right to Represent
At TenantSee, we only advise clients under a formal working agreement that clearly outlines our role as the exclusive representative, the scope of services, and how we are compensated. It’s a short, straightforward document—but a vital one. It establishes our fiduciary duty and marks the official beginning of our advisory relationship.
TenantSee Weekly: The Long Shadow
When companies select a real estate advisor, one crucial yet often overlooked factor is the advisor’s credibility with landlords. It’s understandable why this isn't top of mind — credibility is difficult to measure. But it can be among the most valuable assets your advisor brings to the table. Let's break down what "credibility with the landlord" means and why it matters.
TenantSee Weekly: Is ChatGPT Better Than You (Me)?
If you’re a business professional—accountant, lawyer, engineer, or even (gulp) an office broker—you’ve probably wondered: Can AI do my job better than me?
As a broker who advises office tenants, I tested ChatGPT in a domain I know well. I asked it for average Class A office rents in downtown San Francisco over the last 30 years, including supply and demand dynamics. In less than a minute, it delivered a surprisingly accurate answer.
TenantSee Weekly: What Tenants See Impacts Tenancy
Most of what tenants need to see in order to make smart leasing decisions is not immediately visible. It must be uncovered through strategic discovery and analysis. That’s the mission of TenantSee: to provide the process and resources that bring hidden factors to light. We don’t make decisions for our clients—we make their decisions better.
TenantSee Weekly: What Really Matters
In the business of advising office tenants on leasing space, services are provided by a wide range of firms—from solo practitioners to global public companies with thousands of employees. As in any competitive industry, each firm tries to differentiate itself by highlighting its strengths while casting doubt on the competition.
TenantSee Weekly: AirOffice
For many companies, office space is among a variety of resources they make available to employees to help facilitate work. Other primary resources include technology. In fact, today, technology arguably contributes more to how work is done than the physical office. The diminished role of the office in facilitating work has resulted in changes in how companies look to use office space. One manifestation of this change is in flexible offices, or coworking spaces. This product segment, having grown considerably over the past decade, is tangible proof of shifting consumer sentiment.
TenantSee Weekly: When the Landlord Isn't (the Value of Options)
We’ve written a lot over the past few years about the capital stack, the equity and debt structures that commonly define ownership of office assets. We’ve talked about “broken” capital stacks, situations in which the original equity is wiped out and some portion of the debt may also be under water. We’ve noted it’s very challenging to transact in these assets because the financial partners would need to invest more capital on transactions that would generate negative returns. In other words, good money after bad.
TenantSee Weekly: What's Missing
Negotiating office leases is like any other complex financial decision in that more information leads to better decisions. Yet companies face challenges acquiring the right information at the right time. Why? Because the services typically offered by real estate brokerages are centered on transacting based on site selection and the negotiation of basic rental economics. This is not enough. Sometimes, these services (at least) include a level of multi-building negotiation, exercising a degree of leverage, but too often they lack the proper structure to gather and assess critical data, data that will have a big impact on outcome.
TenantSee Weekly: What Will We Do?
TenantSee Weekly: What Do You See?
TenantSee Weekly: How Investor Exit Options Affect the San Francisco Office Market
TenantSee Weekly: Do Cities Still Matter?
I grew up in a small town but I always dreamed about big cities. I sensed they were special places where, given the right amount of drive, the right mindset, one simply could not fail. Sure, there would be ups and downs, but cities provided access to a robust network of opportunity. This was in stark contrast to the small New England towns of my childhood, many of which never fully recovered from the demise of the textile mills in the early 1900s.
TenantSee Weekly: Middle Manager on the Shelf
Our young children, now 8 and 9, have formed a special bond with Lucy and Jack, two elves assigned by Santa to watch over them. For the past several years, Lucy and Jack have demonstrated extraordinary commitment to our family. They’ve traveled during the holidays, magically appearing at our vacation destinations. They’ve even stayed on after Christmas, despite being needed at the North Pole. Just the other day, I found one of our children covering them in cinnamon (apparently this helps them get their magic back after being touched by humans). To be sure, their presence has sharpened our children’s focus, causing them to think twice about being naughty, providing a welcome assist on the parental front.
TenantSee Weekly: What's the Rate
If you look at the quarterly market reports provided by all major real estate service firms (Cushman & Wakefield, included), you will find that rent data is typically expressed in terms of “Asking Rents”. Reports will cite the trend in Average Asking Rents by submarket, or by building class. This is a somewhat misleading indicator. Why? Because it does not reflect the rent after negotiations, which often includes reductions in rate from the Asking Rate and potentially significant landlord-funded concessions. In other words, Asking Rents reflect what landlords are asking, not what they’re getting.
TenantSee Weekly: Contradictions in Logic
These days, the resetting of capital stacks (the ownership structures for office buildings) is most often facilitated through selling the building. The current market sale dynamic typically involves one set of financial partners (equity, lenders) taking big losses to permit a new set of investors and lenders to “reset” the capital stack on economic terms that provide a pathway to success (e.g., a productive investment).
TenantSee Weekly: A Good Desk
TenantSee Weekly: The Value of Your Lease
People sometimes (mistakenly) think office building values are based on location and architectural design (appearance). These are contributing factors, however, in most urban centers, investors use the income capitalization approach to valuation. Here, the building is valued on current and projected net operating income (“NOI”). To be sure, location and design will translate to differing levels of NOI. But other variables play a key role, as well. For example, the landlord’s cost basis which impacts its ability to lease space at market pricing. Where a landlord has paid too much for the asset, the underlying rental economics of the market may result in net negative leasing outcomes, causing the landlord to lose deals to other assets which have a lower cost basis and can productively transact at market.
TenantSee Weekly: In a Vaccum
Office leases are complicated undertakings comprised of many variables. The markets offer a variety of solutions, ranging from coworking to subleases to long and short-term direct leases. It’s always important for corporate leaders to understand the primary objectives they seek to achieve in leasing office space. But even when these objectives are well defined, it can be tricky to assess which solution is best.