Why Use a Broker?
Renewals are generally a landlords’ most profitable transaction. When tenants move, costs of constructing the new space are built into the lease as part of the rent.
Although most lease renewals involve little or no construction, rarely do landlords offer rates that truly reflect the reduced cost.
Real estate is an investment. Landlords hire professional leasing agents to negotiate the highest return for their building.
If the agent for the building can sign a tenant at a higher rate, they will. It improves the landlord’s bottom line and the broker's commission.
A key to negotiation is competition. A tenant who renews without a broker says, in effect, that no other buildings are even being considered. There is absolutely no motivation for that landlord to be competitive.
Broker Fees
In most cases, building owners hire leasing agents to find tenants for their building. In return, the owner agrees to pay them a commission.
Because leasing agents depend on outside brokers for most of their tenant leads, they usually agree to split commissions with cooperating brokers.
Real Estate law simply requires tenant representatives to notify the owner, or their agent, that they are representing the tenant in the transaction.
The landlord typically pays our fees. The landlord also pays the leasing agent, and the commission is split between us. If a broker is not involved in the transaction, the building agent still receives a full commission.
In most cases, straight lease renewals result in a decreased rental rate for the tenant, depending on the market and the amount of construction required in the original lease.
the Arizona Department of Real Estate