Do I need an agent to lease a small office?

Question

Good morning BPers. I'm interested in leasing a 300 - 500 sq.ft. office space in Southern CA for about $500-800/mo. Do you recommend I get a RE agent for this transaction?

All of the building owners I talk to say no. In fact, one refused to deal with a RE agent at all. However, I want to make sure I get the best deal possible and the building owner doesn't sneak in any clauses that could hurt me. Also, I would feel comfortable having a pro negotiate on my behalf.

Should I get an RE agent for this small transaction or is it unnecessary? If I DO get one, how does their fee work?

Thanks.

Bill Gulley · Answer

See your attorney. I'd suggest you specify the type of business to be conducted, for example, an Insurance Agency and all things generally related to the activities thereof. That will keep a tenant from spinning off some odd ball business ventures that could change the risk assumptions made, the amount of traffic, hours of operation, etc.
A commercial lease can be a hundred+ pages long or less than 10, your attorney should cover the bases for your area.

The meeting of the minds comes not only from the written agreement but by conversations you have with the tenant, be fair and consistent.

And, BTW, a good RE Broker may well pay for themselves compared to who you might find, I'd keep an open agreement as to filling the vacancy with you managing if they would, that might be harder to do than say as mgt is where their money is.

Scott J. · Answer

Very helpful. Thank you gentlemen.

On a side note, are there any clauses or terms I should watch out for in a small office lease such as this?

Joel Owens · Answer

I agree. That is a very small transaction for a lease. An attorney usually gets paid by the hour where an agent gets paid based on the size of the deal and time involved to close the deal and any ongoing residuals with the lease.

You can tell the owner you would be happy to meet his request of not using an agent but would need your attorney to review any agreement before proceeding. If the landlord balks at that I would look elsewhere.

Negotiate a set fee for services with the attorney so the fees do not go to high. The fees and time involved can get very expensive.

Jon Klaus · Answer

I would say you do not need an agent, but I would hire an attorney to review the lease.