In Chapter 6, we’re introduced to a new character in the ecosystem, Tony the Tenant Rep Broker.

The tenant rep broker, in this case, Tony, represents the interests of tenants looking for space. His role is to understand the needs and objectives of his client, Peachtree Capital, and to match them with the best possible spaces available on the market. Tony’s responsibilities include identifying potential properties (like Harbor Yards), arranging tours, negotiating lease terms, and ultimately helping Peachtree Capital find a space that aligns with their operational and financial goals. So Ollie will be focused on sourcing tenants like Peachtree via their brokers, like Tony.

Marketing Harbor Yards

To get their available spaces in front of Tony and other tenant rep brokers, Ollie and Rachel will leverage email marketing, where they create targeted email flyers that highlight the key features of Harbor Yards—such as its prime location, modern amenities, and flexible floor plans. These flyers are sent out to a curated list of tenant rep brokers, including Tony, to generate interest and inquiries.

In addition to email campaigns, Ollie and Rachel use CoStar, a leading commercial real estate database, to list available spaces and reach a wider audience of potential tenants. CoStar is the primary database used in commercial real estate leasing which Tony leverages to build his tourbook for Peachtree.

Ollie and Rachel will also invest heavily in broker events, where they’ll throw lavish parties for Tony and other tenant rep brokers in vacant spaces of Harbor Yards, giving away cars and complimentary umbrellas and Amex gift cards to ensure Tony gets eyes on the space–and thinks of it the next time he has a tenant requirement.

The Leasing Process: From Tour to LOI

Once Tony identifies Harbor Yards as a potential fit for Peachtree Capital, the leasing process kicks into high gear. Tony arranges a tour of Harbor Yards with Ollie, during which he and his client, Peach Capital, will explore the available spaces, ask questions, and assess how well the building meets their requirements.

If Peach Capital is interested, the next step is to submit a Letter of Intent (LOI). The LOI outlines the basic terms and conditions of the lease, including the proposed rent, lease term, and any special conditions or requests. This document serves as the foundation for formal lease negotiations, providing both parties with a clear understanding of the key deal points before moving forward.

Commission Calculation and Splitting

When the lease is finalized, both Tony and Ollie will receive commissions as compensation for their roles in the transaction. Commissions are typically calculated as a percentage of the total lease value, which includes the base rent multiplied by the lease term. The tenant rep broker, Tony, is typically given a larger percentage of the commission than the landlord rep, Ollie.

So on a 7-year lease for 5,000 square feet at a lease rate of $50 per square foot, the commission splits might look like this:

Gross vs. Net Rents

In this chapter we’ll also dive deeper into the difference between gross and net rents.  Net rents refer to the “base rent” only (does not include taxes, insurance and operating expenses); whereas gross rent refers to the all-inclusive rental rate where the landlord covers all property expenses such as taxes, insurance, and operating expenses.

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