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Keeping an Open Mind in the Rental Market

Keeping an Open Mind in the Rental Market by George Grace

It’s a presidential election year, and while that often has implications for markets, it is also a useful insight into people’s thinking. Politics engenders passion, so what we often see are people entrenched in their positions—sometimes while ignoring potentially important points of view. 

Businesses that are looking for commercial office space can also exhibit this lack of objectivity, but instead of political candidates, they are often dead set on a particular building or neighborhood. My job as a tenant representative broker is to inject some objectivity into the decision-making process by expanding the stakeholders’ mindset to look at the broader picture. 

The process is informed by several interests that can be found within most entities: 

  • The CEO of a high-image company will not want to be in a tertiary building, instead preferring a visible building, well-located building, or well-known building. 
  • The CFO tends to want to control costs. 
  • The marketing and sales people typically do not pay attention to costs. Instead, they prefer real estate that makes the company look prosperous. Being in a high-priced, beautiful building impresses their customers, making their sales job that much easier. 
  • The HR department also wants a nice space to attract talent. 

Testing the Hypothesis 

A hypothetical client wants a hundred thousand square feet in Midtown Manhattan. 

To test this client’s hypothesis (that these locations are necessary to the business’ success), we would find a space that is not necessarily in that area but has other attributes that make it compelling. 

In the end, this hypothetical client may still choose to go to Midtown—but if I did my homework and gave them other options, their decision would be even stronger because they would have considered many other opportunities. Quite often, one of the other locations turns out to be the one they choose. 

For a good broker to do his job he has to, to a certain extent, challenge the status quo; to be a trailblazer when clients cannot see the forest through the trees. If you have a sneaking suspicion that you may be experiencing tell-tale myopia associated with politics—and complex decision making—get an outside opinion. Contact me today!

George Grace

George E. Grace
G.E. Grace & Company, Inc.
232 Madison Avenue
New York, NY 10016