Frequently Asked Questions
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Why should my company engage an experienced real estate advisor?
The landlords have professional representation looking out for their best
interests; your company needs the same. Your Avison Young broker will create a
competition for your company's tenancy in the marketplace among landlords. This
often results in a company paying lower gross occupancy costs in the final lease
agreement reached.
Why do you recommend an industrial tenant sign a mandate letter with one
specific advisor?
Signing a mandate letter with a licensed agent or
broker ensures that you will have one advisor working hard to represent your
company in the marketplace. He or she will take ownership of your company's
needs and generate a competitive process among landlords for your company's
lease. Talking to several brokers simultaneously, without committing to work
with any one specifically, does not provide any one person with an incentive to
look out for your company's best interests.
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How are Avison Young's advisors compensated for their time representing my
company?
The landlord with whom you eventually execute a lease usually
pays your advisor. Compensation is typically consistent throughout the
marketplace (rarely does one landlord pay substantially more than another to
brokers) and is based upon the size of space you lease, and the length of term.
Having a signed mandate letter from your company typically ensures an advisor
that he or she will be paid by the landlord once your lease is complete.
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What is a mandate letter? What do I agree to within it?
A Mandate
letter is written direction to a specific Broker giving that Broker exclusive
authority to represent a Purchaser or Tenant in an anticipated real estate
transaction. The Purchaser or Tenant, the Buyer, agrees to forward to the Broker
any sources of real estate information which come to it's attention for a time
frame which is consistent with the proposed transaction. The Buyer also agrees
to put any offers through that Broker for properties which have been identified
during the course of the Mandate, regardless of the source.
The letter
usually states that the Broker will use it's commercial best efforts, will bring
all relevant properties to the attention of the Buyer, and has a fiduciary
responsibility to the Buyer only.
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Can an Avison Young advisor assist me with my company's renewal?
Yes. Advisors are licensed real estate agents who can be engaged to
negotiate a renewal on behalf of a tenant; they are typically compensated by the
landlord for this effort, similar to the process for a new lease. Note: a good
advisor will always analyze renewal as one of your overall options.
How much time should I allow for the process of looking for new space?
Avison Young prefers to start at least 12-18 months prior to lease expiry.
The process can take longer if a build-to-suit (new construction) is the best
option for your company. If insufficient time exists, your advisor can often
negotiate a short term extension with your landlord to provide more flexibility.
I'm new to negotiating real estate deals for my company, can you tell me
the typical step-by-step process?
This will vary slightly depending upon
your company's needs and the individual advisor you select. However, here is a
general outline
- Interview and select an advisor who is a licensed real estate agent (broker)
in your province. You will be working closely with this person so make sure you
have a good rapport; also ensure that this person has adequate time to devote to
your company.
- After you sign a mandate letter, this advisor will work with you on a "needs
analysis" to outline your company's needs at a general level. This might include
an analysis of owning versus leasing and renewal versus relocation. Other
required features will also be identified from dock and grade doors, to rail
spurs and amount of office space versus warehouse or manufacturing space you
require.
- Your advisor will translate this into real estate terms, and create a
specification sheet for your company.
- This specification sheet will be used as a guide to identify all available
options suitable for your company.
- Together with your advisor, you will review and short list the options,
typically touring the most promising buildings.
- Your advisor will then prepare and submit a Request For Proposals to the
landlords of the preferred options.
- Based on responses from the RFP, you will choose your preferred option and
your advisor will negotiate terms with this landlord.
- Once terms are agreed to, a lease will be executed
- Finally, the advisor will provide you with a detailed summary of the
transaction for your company records.
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My company has multiple facilities across North America and even in Asia
and Europe, can Avison Young help me with all of my real estate?
Yes. We
work with numerous clients with multiple locations and can provide real estate
transaction and advisory services world wide. Avison Young works across Canada,
and with our US and worldwide affiliations with the Grubb & Ellis Global
Alliance, we have the network to represent your company globally.
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