"Never take the advice of someone who has not had your kind of trouble." - Sydney J Harris
Seeking advice from the wrong person can lead commercial tenants into trouble. To assess a potential advisor's credentials, consider whether they genuinely understand your challenges. Genuine empathy often stems from firsthand experience—having "been there and done that"—cultivating insight and understanding.
Let us consider the common problem of seeking advice from the wrong party and how this disadvantages the recipient, regardless of the type of advice sought. Consider buying a house but relying on rental guidance from the real estate agent. Since the agent represents the owner and earns a commission on the sale, their advice is inherently conflicted. Pricing comparisons may be skewed, and critical negative details about the property could be withheld, leaving the buyer to uncover important information on their own. Similarly, imagine someone planning for retirement who consults a financial advisor tied to a specific retirement product. The advisor's primary goal is to sell their product, which may not be the best fit for the retiree's needs. In both examples, the advisor's interests differ from those of the individual seeking guidance. Their motivations are misaligned, resulting in advice that often leads to suboptimal outcomes for the recipient. Relying on conflicted advice carries the risk of causing significant harm to those who depend on it.
The same fundamentals apply to commercial leasing and the provision of advice to commercial occupiers, be they office, retail or industrial occupiers. This advisory space is dominated by large commercial real estate firms that receive most of their income from landlords, with commissions tied to capital transactions and leasing. The comparatively minor income that these firms receive from advising and representing commercial tenants is a small part of the whole. It is in the interests of these firms to protect passive and risk-free income for landlords and to keep asset values as high as possible. In contrast, the opposite is essential to a commercial tenant who seeks to minimise occupancy costs and derisk the leasing arrangement. The 'kind of trouble' that the commercial occupier is concerned about is very different to the focus of most advisors, for the commercial occupier is focused on how they can optimise their utility of a leased asset for the lowest occupancy cost and with flexible provisions that work for the occupier in all circumstances.
We end this insight where we started, noting that commercial occupiers do well to ensure that their advisor on leasing matters understands and empathises with their 'kind of trouble' and how the landing point for a leasing arrangement will either help or harm their enterprise over the lease term.
Who is LPC, and how can we help futureproof your accommodation arrangements
LPC is a conflict-free advisor to commercial tenants across Australia and New Zealand. We facilitate strategic review of accommodation strategy, represent occupiers to secure best-fit accommodation arrangements, provide a lease management service to multi-site occupiers, and oversee fit-out and relocation for clients. Contact us for help with your accommodation strategy review.
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