In the 1960’s and early 1970’s the tenant was in a stronger negotiating position but lacked the real estate expertise to fully take advantage of its position. Additionally, most of the real estate professionals worked for “full-service firms”, i.e., large firms that received the majority of their revenues from working on behalf of the property owner. In 1972, LaSalle Partners was formed in Chicago as a boutique, tenant representation firm in the nation’s second largest market for commercial office space. LaSalle Partners was subsequently acquired in 1999 by a major, full-service firm.
In the late-1970’s, tenant representation received a major boost when a former professional football player, Roger Staubach of the Dallas Cowboys, started his eponymous tenant representation firm in Dallas. Roger’s celebrity image, football successes and personal reputation of ethics and integrity gave credibility to the role of a tenant representative as trusted advisor. His firm was subsequently acquired in 2008 by one of the large, international full-service firms.
In 1984, Michael Silver formed the Equis Corporation in Chicago. Equis was one of the first firms to assemble a “platform” of tenant representation offices across the nation’s major real estate markets in an effort to service the corporate client with a “portfolio” of commercial office locations. Additionally, Silver anticipated the clients’ needs for ancillary tenant representation services, such as construction project management, lease auditing/databasing and workplace consulting. Equis was acquired by an Australian firm in 2006.
In 1993, a group of leading regional commercial tenant representation firms, with twenty-year histories in their respective markets, joined forces to form CresaPartners, one of the fastest growing corporate real estate advisory firms in the country. By 2011, CresaPartners had over fifty North American locations and in excess of 800 professionals, both record highs for the tenant representation business.
By 2011, tenant representation has evolved into a standard operating practice for the well-informed company looking to lease office space in one or more of the large, landlord-dominated office markets. As consolidation of commercial property ownership by Real Estate Investment Trusts and other institutions continues, tenants will demand unbiased and unconflicted advisors in order to recreate the negotiating leverage of the 1950’s advent of the tenant representation practice. It will be interesting to witnesse how the future needs of the next generation of tech-savvy tenants and mobile workforces impact the ongoing evolution of the tenant representation model.
In early 2012, Jack Petrie founded OfficeLeaseCenter.com. OLC was created to build a commercial real estate platform that would remove the opacity and inefficiencies for the smaller, technologically-savvy office occupier.