AboutJohn Smiley Expertise I am a commercial lease negotiator who specializes in representing dentists, doctors and other professionals. I have represented every manner of tenant (retail, industrial, office, professional) and only negotiate on behalf of tenants. I can answer questions that deal with commercial landlord/tenant relationships, negotiating factors and strategies, process-oriented questions, and other matters that pertain to commercial landlord and tenant rights and obligations.
Experience I am a commercial tenant representative, specializing in negotiations on behalf of doctors, dentists, chiropractors, and other professionals. I have been a real estate professional for 10 years and have negotiated over 600 commercial lease transactions or 20,000 lease amendments, almost all representing the tenant.
Education/Credentials B.Mgmt. (Finance)
Real Estate License
Question I am a residential agent who recently received 3 commercial lease transaction. I am reading alot of information to properly negotiate for my clients. My question is how is the compensation for my services paid when the property is not official listed? How is compensation for a 5 year commercial lease structured, including renewal years? I have noticed in commercial listings in Texas, commissions are often not mention. How do I know the amount the listing agent is offering is truly 1/2 of the amount the seller is paying?
Answer Hi Maria,
When I worked as a commercial leasing agent, if the fees were not stated, I always asked the listing agent during the first phone call. There's nothing wrong with asking what the commission is.
As far as whether they're truly offering half, I suppose there's really no way to know. There's a certain amount of trust that tends to build between various agents (or lack thereof).
It's wise to know what the "going rate" is in your area. Where I live, it's typically $1.00 per square foot per year up to five years (for office). If it's a ten year lease, then typically the last five will carry a different rate. In my jurisdiction, there is no commission paid on renewals, though that could vary from area to area.
Retail is usually paid as a percentage of rent where I am--typically 5% of the face rate. Industrial transactions are also a per-square-foot rate here, varying between $0.60 psf/annum to $1.00 psf/annum, depending on how anxious the landlord is to unload the property.
