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Tenants are constantly asking us, "how do we save money?" Leasing is expensive, in fact, the SBA estimates commercial leasing costs are #2 on a businesses total expenses, right behind payroll. So why is it so hard to control costs?
Well, the first issue is the lack of transparency and consistency in pricing. If you’ve ever searched for commercial space you’ve been bombarded with ten different ways of quoting rent. From NNN to Gross to Modified Gross to PSF/YR or Month and beyond. Oftentimes, these sites are totally reliant upon brokerages (listing and leasing agents) to keep this information accurate.
The simple truth is that it’s not kept up to date, and worse, sometimes it’s purposefully kept low in order to drive a call to a broker or building representative.
The classic example is pricing a listing online as NNN, which is only 2/3rd’s of the total costs at best, and confusing the initial Tenant by suckering them in with a lower rate. The reality is that rate isn’t the full picture, it’s disingenuous, and it’s wrong. It’s also the standard for 99% of listing services and search engines out there. There just isn’t any quality.
This leads to misalignment on budget, and enormous frustration on the part of the Tenant at step one. So how can we solve this, get the Tenant to building’s that actually match them...oh and then save them some serious money? Data, science and smart-matching algorithms.
At Tenavox, we built our platform from the ground up for the Tenants, to solve these issues and education and empower businesses to make great lease decisions. How do we do it? Well, we’ve developed a two-sided program that makes the process of finding space a breeze for Tenants, while also making the process of matching with those Tenants a breeze for Landlords and their representatives.
We start with a simple wizard built with feedback from our Tenants and the Landlords who lease them space. It takes less than a minute to fill out and does a couple of really important things.
- Our Smart-Match system culls the vast majority of non-relevant properties out from our database of over 100M S.F. in just seconds.
- By taking the Tenants key preferences on location, size, type, budget and a multitude of other important factors we actually score these matches in real-time, allowing Tenants to rank, choose and sort the best properties for them instantly.
For Landlord’s this operates a bit like dating, we’ve done the work to ask them what types of Tenants they’re actively looking for so we’ve immediately created an alignment of interests between Tenant and Building, at first step. Neat!
Tenants on our site get access to exclusive ratings, reviews, amenity layers and more on each and every building we have in our database. Lastly, we show them our exclusive VoxRate, which is an AI-powered estimate of what they should pay, not just a random or half-baked quote from a listing site. Every building on Tenavox has a VoxRate, which is based on a total (gross) costs per year, so you can make an accurate budget assessment when you search. No More, NNN nonsense, misalignment or wasted time calling buildings outside of your true budget.
Our Tenant members connect with properties when they are empowered with ratings, reviews and this important budget factor. All instantly. It’s the modern way to search for space.
So what’s wrong with the other services out there? Tenavox is 100% free, we’re compensated for delivering high quality, qualified leads to buildings and vendors who are part of our platform. We do not charge for “listings” and maintain, update and keep our database current ourselves. We use exclusive machine-learning data science and good old fashioned hard work to keep our building data accurate and our vendors information up to date.
It’s our promise to Tenants that when they use Tenavox they get the best consumer experience in commercial real estate.
So how do we save our Tenants over $10,000 per lease? Simple, with knowledge and empowerment. Using the tools and data above, many of our members are able to do deals directly. Armed with information on the leasing process, data on the market and the confidence of knowing what to pay with our VoxRates, Tenants are negotiating deals on their own.
Why does this matter? Because commissions are paid by Landlords one of two ways.
- If a representative is involved on behalf of a Tenant, and a Leasing Agent then a Landlord is typically responsible for a 6% commission on the total rents over the term. In Houston, the average lease in the office market is +/-6,500 S.F. over a 4 year period at $27/PSF/YR Gross. So roughly $700,000! A commission at 6% is over $40,000. Now it gets interesting, the Tenant is so valuable to a transaction, their broker (the Tenant rep) is paid 4% the 6, or 2/3rd’s of the total commission! That’s $28,000 to the Tenant broker! The Landlord does not mind the split of course, however, leasing agents sometimes do :)
- Now, when a deal is done direct, the Landlord is only responsible for a 4% total commission, not 6. Leasing agents also capture 100% of this commission now since there is no split. So, what does this mean. Yes, there is a compelling financial argument for Landlord’s to do deals direct and certainly for leasing agents. It also means, you as a Tenant should be saving 2% of your gross deal value (Total rent over the term) on every lease!!!
Our members get this, they know that 2% is there and they capture is using the knowledge and process we teach them in our platform, education resources or even by connecting with one of our team members and getting advice, all 100% free.
Now, does this mean we don’t like Tenant brokers or don’t want them on our site? Absolutely not, in fact, quite the opposite. Over 50% of our Tenants are asking for a broker! Running a business is a busy endeavor (trust us we know) and oftentimes Tenants ask us to help them find a qualified, local professional. Our VoxLink program connects them with the best brokers, who represent Tenants of their type, in their market, at step one. So there is a great alignment of interests and a serious, dedicated professional for our Tenants. You say, well they may not get the 2% then? Well, a great Tenant representative is going to bring a lot more to the table than just saving you money, they will earn their fee through consulting, domain knowledge and market skills to provide an enormous value.
At Tenavox, we’re all about choice. For our Tenants who want to make a deal direct? We make it easy, teach them how to do it and empower them to make a great decision. For our members who want to be represented (for any reason they choose) we make sure they get a qualified, commercial broker who will earn their fee and beyond. It’s the way we feel best to do business, educated, informed and empowered at every step.
Not every broker (or building) makes it to Tenavox of course, we have a strict qualification process for any of our VoxLink Vendors and our building database is focused on Tenant-rich areas. We’re constantly adding and evolving both, so feel free to reach out if you know a great broker, building or Tenant who can benefit from what we do here at Tenavox.
We make the commercial lease decision easier, faster and more transparent platform. Come see how we can help your business today at www.tenavox.com
Need Help? Check out our exclusive Education Center to Learn and Empower your decisions.
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