Let’s address the elephant in the room. Ask anyone what they think an office broker does and ‘an estate agent for offices’ probably springs to mind - along with the negative associations that come with it.
Will they act in our best interest or just be concerned with their commission? And are we not just better off doing it ourselves in a world where “Rightmove for Offices” sites exist?
Just 28% of people trust estate agents to tell them the truth. Only government ministers, advertising executives and politicians fare worse for trustworthiness.
Source: Ipsos Veracity Index 2022
Most office brokers operate like estate agents - effectively acting for both parties. So much so that startups.co.uk assume that this is the business model (more on this later) and that can cause common issues.
We operate differently - and as someone once exclaimed when I was asked to describe the difference:
‘Oh, so you’re like Kirstie and Phil from Location, Location, Location but for offices?’
Not quite. (For one, we won’t tell a business that their out-of-budget dream office is possible if they just cut back on a few Starbucks!)
But it’s a fairly similar analogy in that we do help the tenant only - helping them assess what’s important, providing market intel and even helping with negotiation. (Though I very much doubt Kirstie and Phil are on-hand with introductions for fit-outs and the legal paperwork after the deal is closed!)
So with that in mind, I wanted to clarify the difference. Here’s what I’ll cover in this blog.
This Blog Post will cover:
➡️ Working with an office broker: the honest concerns of past clients
(The survey that prompted this blog!)
➡️ What is an office broker? (The typical model)
And the problems that can arise with it
➡️ Why everyone needs a property buying agent
(Whether it’s personal or business)
➡️ The business benefits of having an office broker in your corner only
Working With An Office Broker: The Honest Concerns of Past Clients
Like most businesses, honest feedback from past clients is essential so we recently interviewed and surveyed a few.
One of the questions we asked was:
“What was your number one potential objection to working with Level?”
Admittedly, these objections were much easier to overcome when 75% of our business comes from referrals or inbound - but it shows that there were still lingering doubts before our first meeting.
Why? I believe it has to do with the way office brokers usually operate - acting for both parties. I’m not suggesting that all office brokers act in this way but this is why we’ve chosen to operate differently.
So what is the typical office broker model?
What is an office broker? (The typical model)
Most office brokers work for both the tenant and the landlord/office owners. They help find business owners a workspace and they advertise offices/coworking spaces on behalf of the landlord or owners.
The common perception is therefore that all office brokers work in this way. So much so that it’s taken as a given that they do as this excerpt from startups.co.uk shows.
Co-working office brokers and coworking agents are organisations which connect business owners who are looking for a new workspace with the right coworking space for them, at the best price possible.
Not only do coworking agents offer this service to business owners, but they also provide advertising services to coworking space owners.
They do this by listing spaces on any online search database they may have, advertising the space through newsletters, social media and other marketing, and of course, directing potential customers their way.
The problems with the typical office broker model
Where's the loyalty to the tenant?
When you represent both parties, how can you ever give truly impartial advice and act in the tenant’s best interest?
With this business model, most office brokers have to meet Service Level Agreements that show that they have actively advertised a landlord’s property - whether that’s through their online marketing or the number of building visits.
And in doing so, there is no in-built loyalty to the tenant.
And then there's the other hassles
Anyone that's ever bought a house has likely had to battle through the minefield of:
➡️ Proving they’re viable enough to not waste the vendor’s time
➡️ Trying to view properties before they’re taken off the market
➡️ Negotiating a fair offer
➡️ Hoping they don’t get gazumped
➡️ Relying on the estate agent selling their property to move the contract negotiations along - who may also be instructed on the one they’re buying.
It’s much the same in the office space search - where in-demand properties are often snatched up off-market and businesses have to grapple with complex contract clauses.
One of our clients worked with us after the ‘deal’ they believed they had secured with an office agent fell through because they were “gazumped” by an existing tenant. The estate agent had to favour the existing tenant as they were marketing the space on behalf of the landlord.
That’s not to say that every office broker - whether they are online or someone you meet with - works that way. It’s just that it can be a tricky balancing act to manage meeting both parties’ interests without compromise.
We’ve chosen a different business model by acting only for the tenants. Just like how in the States people have buying agents - or in the UK they feel forced to apply to a TV programme to get someone on their side!
The business benefits of having an office broker in your corner only
Finding the right office space is essential for your business. Many fast-growth firms now realise that their workspace can be an asset that employees are excited to come into and collaborate in. So the stakes are high to get it right.
Working with an office broker that acts only for you brings a number of benefits.
Your time's better focused on growth
As one start-up founder told us:
“I didn’t have time to hop on the Google merry-go-round.”
The first place many homebuyers turn to is Rightmove. And with the rise of online office portals or “online office brokers”, the search for a new workspace is quickly becoming the same.
But as anyone who has anyone who has bought a home knows, you can quickly lose yourself down the Rightmove rabbit hole - or in the case of office searches, online office search sites.
When we asked our clients why they chose to work with us versus doing it themselves, one of the biggest motivations was saving time. If you're busy growing a company, you don’t have time to waste searching for properties and trying to determine if they have everything that you need.
Avoid the perils of “But we’ve seen that office online”
How often has a couple on Location, Location, Location claimed to have “viewed 100s of properties” - only for it to transpire that what they really mean is they’ve “viewed” them on Rightmove? Cue a serious scolding from Kirstie as she realises that they’ve ruled out properties that could be perfect for them!
Photos and floorplans only go so far. We even had one client who had taken to the streets of Manchester before working with us. Why? It was so that they could get a better feel for what the offices looked like and which businesses they would be near. Even with photos, video tours and floorplans, there’s only so much you can find out online.
A great office broker should intuitively know what building will provide what their client needs. They should take a brief but be able to push back and say, “ But have you considered these issues? “
- This building’s landlord caters for start-ups in the same space as you.
- The sense of community here is better for what you need, etc.
- I know you said you need to be here but we’re seeing an influx of businesses using this location or building for these reasons.
- These are the workspace criteria others are using at the moment and it’s helping them attract top talent.
Uncover off-market opportunities
Location, Location, Location popularised the concept of flyering letterboxes in the hope of discovering an off-market opportunity. In some cases, it was to overcome a lack of suitable properties for the pickiest of buyers. Others wanted to avoid losing out on another property due to a bidding war at the height of a sellers’ market.
The office market is experiencing a similar buoyancy to that of the 2020s house property market. Businesses realise that their workspace can be an asset to their growth and hiring plans and the competition for office spaces is tough - especially if you have a specific vision for your new workspace.
And that’s where an office broker can help by uncovering an off-market opportunity. At Level, we’ve built great partnerships with landlords and tenants. We’ve brokered deals where we understand that a tenant wishes to move on soon but hasn’t given notice for fear of reprisal. The result is a win-win for the client, previous tenant and landlord.
Overcoming "Computer says no"
There was a brave LinkedIn post from a social media AI software founder recently calling out the inability to book an appointment to view offices because they didn’t meet the right criteria. His requirements didn’t fit within the confines of the office desk number requirements available.
He's since removed it but it was accompanied by this meme...
It says a lot about the frustrations experienced by businesses looking for office space. A little like how homebuyers sometimes have to fight estate agents for an appointment if they’re not the perfect possible buyer.
This is where an impartial office broker can help as they have relationships with the landlords. They can advise you on which landlords may be more flexible. And they can help present you to the landlord in the best possible light, considering issues such as:
- Are you a fast-growing start-up or scale-up?
- Do you have an active existing network?
- Are you their target industry clientele?
- Would your presence attract others to their building? (This has been key for quite a lot of the deals we take)
Help with negotiations
During the midst of the housing property market madness, buyers often got caught up in bidding wars. “Best and final” offers and properties selling for more than their listing value in sought-after areas became the norm..
In fact, it’s arguable that sometimes the only reason that some applicants went on Location, Location, Location was to have someone in their corner when it came to negotiations!
When we surveyed our clients, they felt the same - getting a better deal or outcome was one of the reasons they chose to work with us.
An impartial office broker can help you with broker a realistic offer, any extras the landlord may be able to offer you and which terms to be aware of.
Ultimately, though, a great office broker understands that the best outcome isn’t always the lowest possible deal. Push it too far in favour of the tenant and there will be tensions. Nobody wants to be on the receiving end of a “bad deal”.
Get the market intel: what’s realistic with your budget
Let’s end with the aspect of Location, Location, Location that often leaves fans screaming at the TV - or taking to Twitter in droves:
The house buyers who want everything a million-pound house on a £300,000 budget.
The best office brokers understand exactly what you can get for your budget. They should be able to say, “If you’re looking for something like this, you’re going to be paying this per square foot or per person.” And they should be able to tell you what the industry standard is i.e. what’s average vs what the leaders are doing.
If an office broker is acting solely for you, you know that there’s no hidden agenda. You’re not pushed into an unsuitable office to meet numbers, but you can expect push back against unrealistic expectations.
Final thoughts
As I said, every office broker works differently. The negative perceptions aren’t always fair. And just because an office broker works for both tenant and landlord, it doesn’t mean you won’t get a fair deal. It’s just it makes it much harder to balance the landlord and tenant's interests.
We’ve chosen the model that we believe works best for tenants. By working only for businesses looking for offices, we can do more than just provide viewings. We help with the overall workspace strategy - giving our clients the market intel they need to make informed decisions on what will achieve their business goals.
If you’re a fast-growth company struggling with building collaboration and culture in a hybrid world, our free eBook can help. Just click on the link below for instant access. (And no, you won’t need to give your telephone number because being pushy is not our style!)
