Lease Negotiation FAQs

Frequent Questions & Answers

1. What is a tenant broker?
   

   The Department of Management Services has engaged the services of The Staubach Company to represent the State in its private market leases. They are charged with aggressively negotiating improved lease terms and reducing occupancy costs across the State?s 7 million square feet private office space portfolio.

   The Staubach Company has been operating in Florida for over 18 years. The execution and management of the State account is the responsibility of its Tallahassee-based office in concert with its three other Florida offices. Over 35 professionals provide their expertise to the State account. Company information: http://www.staubach.com.

2. How is the tenant broker compensated?
   

   The tenant broker is compensated entirely by a commission negotiated with and paid by a landlord. There is no compensation required by the State. The relationship is similar to selling a home, in which case the seller typically pays an industry standard commission to both the selling and buying agent. Many landlords currently pay commissions to their own broker and now direct a percentage of that commission to the State?s broker. In order for a lease to be executed and a commission paid, it must be approved by DMS and demonstrate a savings or other material value to the State.

   No commissions are paid for renegotiated lease term currently entered into by the State. Only future rental rates are included in the consideration of a commission which is set not to exceed 4%. The 4% is only applicable for the first 10 years of the lease term and 2% thereafter unless otherwise negotiated with the landlord. This compensation model is standard to the industry.

   Once lease terms are negotiated and approved, the lease is executed. Upon lease execution the tenant broker typically receives ½ the commission amount. The remaining ½ is provided upon tenant occupancy.

3. What services are provided by a tenant broker?
   

   Staubach currently employees 35+ professionals supporting the State of Florida account. In addition to traditional broker representation, they provide support services including:

   • Architectural services, space evaluations and space planning
   • Current market rate surveys and analysis
   • Strategic consultation and studies
   • State of the art transaction tracking software
   • Dedicated on-site account manager
   • Lease- Purchase financial analyses
4. What benefit does the State receive?
   

   The State has recognized significantly improved lease terms for those transactions completed with the use of a tenant broker. The Staubach Company has concluded 68 lease transactions which have resulted in a $66M reduction in rental obligation for the state over lease terms and an additional $19 M in tenant improvement allocations.

   The Staubach Company has provided the State with a broad understanding of state-wide real estate markets and unparalleled market data necessary to get our rates back in line with local markets. They have applied their superior real estate expertise and experience to identify tremendous savings opportunities in the ever changing commercial real estate world. They have provided a lease tracking software that affords transaction information with accessibility and transparency for agency leasing managers on any given lease on any given day. They have identified successful cost-effective solutions to the State?s overpriced and underutilized office space portfolio that have resulted in significant space quality improvements and savings to the State.

   Florida is following the examples of Colorado, New York and the Federal Government by leveraging its leasing power and utilizing effective representation. We have equaled the playing field when negotiating leases for the State. There is no doubt, to the tune of $66M in savings to date, that The Staubach Company has developed a specialized team of professionals focused on delivering cost savings strategies to the State.