VIRTUAL RENEWAL - Choyce Peterson adds online tool

April 14, 2009 – By Peter Healy, Staff Writer, The Advocate / Connecticut Post

The principals of Choyce Peterson Inc. said they believe that half of all office lease renewals happen without a broker.

So the Stamford-based commercial real estate brokerage has added a "virtual broker" function to its www.choycepeterson.com Web site. The feature gives tenants information to help them negotiate their deals with landlords more effectively.

Choyce Peterson Principal John Hannigan said the virtual broker aims to help tenants to leverage more favorable rent, better renewal options and other concessions in a soft office market. Site visitors can use it for free.

"When we paired what we learned over the past 10 years with the incredible negotiating opportunities available to tenants in today's market, we felt strongly that there was a significant benefit to provide tenants with an electronic playbook, which both identifies and simplifies the research they should do before negotiating a renewal of their lease," said Alan Peterson, the firm's other principal.

Hannigan said Choyce Peterson did not start the extra service to replace live brokers. He said 90 percent of tenants hire a broker when trying to relocate to a new office.

"This kind of site will help raise the bar on the quality of services that tenants can get if they use brokers," Hannigan said. "We have empowered the tenants with more tools."

Choyce Peterson's "tenant tool kit" contains:
A space availability report that shows space for lease within a company's size range and location.

Market statistics on vacancy rates and average rent.

A one-page summary of a sample lease, which may have as many as 30 provisions, according to Choyce Peterson, which was founded in 1997.

A lease report card designed to evaluate a tenant's current lease. It can show red flags and show how tenant-friendly a lease may be while targeting certain clauses that should be addressed in renewal negotiations, Choyce Peterson said.

An office space calculator. Using the online device, a tenant can punch in how much space it needs for executives, receptionists and secretaries, cubicles, copy rooms, kitchens, mailrooms and other facilities.

The tool kit also enables a tenant to find alternatives to its current office space, compares its current building with other buildings and plot where its workers live and how far they commute.

"It's a great idea," Jeff Gage, executive managing director at the Stamford office of Chicago-based Jones Lang LaSalle commercial real estate, said of Choyce Peterson's product. "It doesn't in any way threaten a broker because brokers add value by 'brokering' the difference of opinion between a lawyer for a landlord and a lawyer for a tenant."  Gage said brokers provide "an analytical approach that you can't get off a Web site."

"There have been all kinds of books written about lease clauses that are appropriate for all kinds of situations in the negotiation of leases, and putting it up on a Web site is a natural extension of that," he said.

The Internet has not replaced brokers in any significant quantity in residential or commercial real estate, said Paul Bishop, an economist with the Washington, D.C.-based National Association of Realtors. He said brokers provide guidance and problem-solving skills for tenants in commercial lease deals.

"Most commercial transactions can be very complex, especially on the financial side of the lease."

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