Ryan Hartsell is the managing partner of Oxford Partners. His focus is on Office and Industrial Tenant Representation in Houston, TX.
Tell us a little bit about your background, how did you get into commercial real estate?
I graduated with a master’s degree in Real Estate in 2008 and went straight into brokerage, not because I wanted to, but because brokerage was one of the few sectors hiring due to the credit crisis. I’ve stayed with the same company my entire career and now have ownership in the firm.
We focus solely on tenant and buyer representation and have 11 full-time agents. We focus primarily on Houston but have national clientele as well. We have an extremely diverse client mix; law firms, engineering firms, technology companies, manufacturing companies, environmental firms, medical practices, and companies from all over the world.
The relationships we form and the challenges we overcome is what drives me.
How do you bring value to a transaction for your Clients?
We take a highly specialized, custom approach to our client’s needs and focus on one thing, representing Tenants, so there is never a conflict of interests. This makes a big difference for our clients and it’s one we highlight.
We provide lease abstracts with suggested improvements, space plan programming, and cost projections at the onset of the transaction with no cost or obligation whatsoever. We also perform a robust assessment of a client’s needs up front in order to obtain a firm handle on their requirements before any transaction begins. We also bring in other professionals - contractors, architects, furniture dealers, IT specialists, Project Managers, Designers, etc in order to save time and avoid waste. It’s about getting Tenants the right resources at the right time, which is what drew us to a program like VoxLink.
A good deal of our business comes from negotiating lease renewals, which in my opinion is where we offer some of the best value. It’s important to physically tour and negotiate with other buildings even if the intent to stay in the same building. We’re not just lining up a one pager and moving on; we insist on investing our personal time in making the current landlord compete for the tenant’s continued business.
For example, we recently improved a renewal for a client in late stages of a lease deal by over $400,000. This client negotiated the deal themselves before giving up and hiring us. All it took was a little leverage in knowledgeable hands. They were blown away.
How do you describe yourself to Tenants?
I’m passionate about what I do and understand the client’s stresses because I am a business owner myself. 70% of my business comes from referrals and repeat business, and for new relationships, I typically work on a contingency basis for free until my client is 100% comfortable with me. I absolutely operate with my client’s interest in mind and I never pressure them to do anything. I’m certain I do more 1-year deals than any agent in Houston! I’m not in this for the money. I’m in it for the relationships. Everything else will take care of itself.
What do you tell Tenants before they hire a Tenant rep, or if they have not considered one?
There’s no better way to admit to the Landlord you aren’t considering a relocation than to not hire a tenant representative. If you haven’t bothered to hire a tenant rep this signals to the landlord you don’t intend or want to move. This knocks your leverage down in any deal immediately.
Also, tenant reps give the tenant a massive amount of credibility, leverage and experience. How many leases does the typical tenant negotiate each year? Because we negotiate hundreds. We have a list of 30 important lease considerations that 99% of tenants don’t even know to think about.
Also, we’re a boutique firm, so half of our fee doesn’t go to the stockholders and our performance isn’t pressured by quarterly earnings. Many of our competitors are publicly traded and this has become a real problem. Finally, we personally work on the transactions we procure, and things aren’t getting split up among multiple departments, so this translates to better service and attention, hands down.
Connecting tenants with highly experienced and aligned CRE professionals is what attracted us to the VoxLink platform.
How is the Houston Market for Tenants right now? How does this impact the decision to work with a Tenant Representative?
The office market is very soft with a 25% availability rate while the industrial market is 5-6% vacant.
For our office clients, we are negotiating extremely advantageous deals especially in The Energy Corridor, Westchase and Greenspoint. In some cases, we’re negotiating 20%+ off the quoted rate before the tour. Industrial is tougher, however, so we have to manage the tenant’s expectations and focus on securing the space with fair terms. In any case, we are encouraging a lot of clients to renew early given our projections for the next two years.
Give us an example of how you created some value for a client
We recently worked with engineering firm to expand into 7,000 square feet. We knocked 25% off the rate and received an entire year of free rent on a 72-month term. The building was in receivership and the asset manager was out of state and out of touch. They had no clue about permitting in Harris County and their architect was not an interior office specialist. It was a complete disaster, but we were able to provide an additional project manager and contractor to solve the problem, and ended up saving an additional 30% on construction cost and shortened the construction timeline from 3 months to 5 weeks.
Who do you recommend outside of hiring a Tenant rep to your clients? What vendors of the industry are critical pieces to a successful lease?
Interior architects, transactional real estate lawyers, furniture dealers, commercial movers and a IT consultants are critical. If you already know these people that is wonderful, but if not, it is important to hire specialists in each field. We have those connections.
Thank you to Ryan for his insights into the industry, for more information on Ryan he can be reached at:
Ryan J. Hartsell, SIOR
Corporate Real Estate Services
2900 Weslayan St., Suite 620
Houston, TX 77027
Direct (713) 840-8528
Cell (281) 923-5660