During his career with Hines Interests, Lincoln Property Co. and Equity Office Properties Trust, David Danhof has landed some big office deals.
The 20-plus-year commercial real estate veteran is still chasing office tenants. At his latest firm, though, these tenants need 5K SF or less.
Danhof has been tapped by TenantBase, a firm focused on representing small office and industrial tenants, to spearhead its Atlanta expansion. The brokerage firm is debuting in Atlanta with six other brokers working under Danhof, with plans to hire more.
The move comes months after California-based TenantBase secured more than $10M in funding from New York-based Stonecutter Capital for its expansion. Aside from Atlanta, TenantBase is expanding into Dallas, Los Angeles and Nashville.
TenantBase is a pure tenant representation platform that is focused exclusively on small companies or companies needing smaller portions of space, Danhof said. The firm emphasizes its online presence and website platform to grab leads for its brokers.
When it comes to the small office market, company executives often are the ones directly negotiating leases with landlords, Danhof said. Some business leaders found that doing their own real estate work could be more difficult than they anticipated, he said.
“It was a completely underserved market,” Danhof said. "So we're really not competing with anybody."
REAL Professionals Network founder Rick Lackey — who formerly led the Atlanta office for Grubb & Ellis (now Newmark Knight Frank) — said TenantBase's strategy is founded on the fact that a majority of the deals done in the office market are under 5K SF.
“There's an enormous amount of deals under 5K SF,” Lackey said. “I think it's a very good sector. It's needed. Probably an enormous number of the office brokers who do tenant representation do play in that space.”
Lackey said brokers can earn a solid living on those size deals. An average commission for a 5K SF office lease lasting five years can exceed $40K.
“You do four of those a year and you split 50/50 with the house, that's not a bad year,” he said. "You do one a month, that's not a bad living."
TenantBase's focus on its website sets it somewhat apart from other brokerage firms in pursuing clients in that size range. That focus is one that has become commonplace in the residential real estate world with sites like Redfin and Zillow.
"There are huge inefficiencies and frustrations for both tenants and landlords related to leasing small spaces," TenantBase CEO Bennett Washabaugh said in a statement. "Landlords want to work with credible tenants that understand the process, and our TenantBase brokers guide clients of all experience levels through the process to get more deals done."
Danhof said it was that focus that attracted him to join TenantBase.
“What interested me was the uniqueness of it and the utilization of technology that really isn't being used in the industry,” he said.
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