By Josh Kuriloff, Executive Vice Chairman, and Aron Schreier, Managing Director
As real estate advisors working at a full services commercial real estate firm, one of the concerns we occasionally encounter when representing tenants is the prospect of a conflict of interest. Our tenant clients are often advised by firms who specialize in tenant representation that because we represent both, we cannot have the tenant’s best interests in mind. The reality is quite the opposite. Not only do we always have each client’s best interests in mind, but there are unique benefits to working with a full services real estate firm that specialty firms cannot offer.
Before getting into the benefits of working with a full services firm like us, let’s first address the concerns of conflict of interest and our ability to represent tenant clients most effectively. The most important thing that any client should understand is that as advisors, we have a single fiduciary responsibility, and that is to the client, whether tenant or landlord. Under no circumstance is our fiduciary responsibility to both. When advisors at Cushman & Wakefield do represent both tenant and landlord, that fact is immediately disclosed so as to avoid even the appearance of conflict, and an ethical barrier is set up. We take transparency seriously, and we are always open with our clients in all respects.
For 100 years, Cushman & Wakefield has built a reputation as one of the most trusted advisors for commercial real estate services, and our commitment to transparency and ethics is a major reason why. Over the years we have represented many clients in dual agency situations, and they will all speak to the value we placed on their trust, and the benefit they gained through our advice and execution. Because this particular situation of dual agency comes up so frequently in a full services firm like Cushman & Wakefield, the ability to have clients speak to our character and expertise is essential, and that alone is incentive for us to take our ethical responsibilities seriously.
Aside from the fiduciary duty that we owe to each of our clients, there are real benefits to partnering with a full services firm, benefits that boutique tenant rep firms cannot offer. A full service firm has the depth of resources and knowledge capital to effectively evaluate the overall condition of the asset as well to address all issues of a lease transaction. As a result, we have a deep understanding of key lease components like electricity clauses, operating expense clauses, overtime HVAC costs, in addition to issues related to legal compliance.
Many of these items can result in a significant burden to the tenant if they are not negotiated properly. From an operational perspective, a full service project team helps our clients to negotiate for the necessary electric power and HVAC required to meet their space needs. For instance, for our clients who require trading or who have a high density floor plan, our operational input during the proposal and lease negotiation stages is paramount to their ability to conduct their business and save more upfront time in a comprehensive due diligence process.
Over the past few years we have seen a fundamental shift in the demands of tenant workplaces. Today’s tenants view their work environment as an opportunity to not only conduct their business in a more efficient and collaborative way, but also as a means to attract and retain top talent. It is therefore imperative to have the right resources, such as in-house workplace strategists, to assist in understanding trends in tenant space demands, in addition to being able to properly evaluate building systems and amenities.
All of these are significant factors as a tenant begins to consider its real estate strategy. It is precisely because we work at a firm who services each of these elements, from the landlord leasing to the property management, and because we can work with specialists such as project managers and workplace strategists to provide expert space consultations, that brokers at a full services firm can offer such a depth of expertise and thus best service our tenant clients’ needs in their lease negotiations.
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Josh Kuriloff is a 30-year veteran of the commercial real estate industry. As Executive Vice Chairman, Josh has led some of the industry’s most significant real estate transactions, including the recent assignment for the disposition and acquisition of Pfizer’s new global headquarters in Manhattan.
Aron Schreier is a Managing Director for Cushman & Wakefield, specializing in tenant representation services to multinational companies. He brings more than 16 years experience working in New York commercial real estate brokerage.