Podcast Summary: Second in Command: The Chief Behind the Chief with Cameron Herold
Episode: Ep. 457 - Keyser Commercial Real Estate Founder and Managing Partner, Jonathan Kaiser
Release Date: March 13, 2025
Host: Cameron Herold
Introduction
In Episode 457 of the Second in Command podcast, host Cameron Herold engages in an insightful conversation with Jonathan Kaiser, the Founder and Managing Partner of Kaiser International. This episode delves deep into the intricacies of commercial real estate from the tenant's perspective, highlighting the challenges businesses face when negotiating leases and the strategies to overcome them.
Overview of Kaiser International
Jonathan Kaiser introduces Kaiser International as one of the largest independent commercial real estate firms globally, uniquely dedicated to representing tenants rather than landlords or developers. With a team of approximately 600 professionals worldwide, the firm offers comprehensive services including site selection, lease negotiations, project management, and owner's representation.
"We only represent the business owner or the business executive... we're helping the occupier... from a commercial real estate standpoint."
— Jonathan Kaiser [04:17]
The Tenant-Centric Approach
Kaiser emphasizes the prevalent conflict of interest in traditional commercial real estate dealings, where brokers typically represent landlords, developers, and investors, often sidelining the tenant's best interests.
"The big firms, 80 to 90% of the revenue comes from representing the landlord... 100% of our revenue comes from representing the tenant."
— Jonathan Kaiser [05:00]
This tenant-focused strategy ensures that businesses receive unbiased negotiations, fostering trust and advocacy—a stark contrast to the often adversarial relationships tenants have with traditional brokers.
Challenges in Lease Negotiations
Herold shares his personal experiences with leasing office spaces, highlighting the complexities and potential pitfalls businesses encounter without expert representation.
"You're not out there negotiating with these big landlords... they know how to really negotiate, and you don't even have an idea as to where you can do well."
— Cameron Herold [04:32]
Kaiser concurs, pointing out that brokers motivated primarily by commission may not push aggressively for the tenant's best deal, often adhering to the landlord's preferences to secure future listings and relationships.
Adapting to Changing Work Environments
The conversation shifts to the evolving landscape of office spaces post-COVID-19, with many companies adopting hybrid models. Kaiser discusses how businesses can navigate lease adjustments in response to fluctuating space needs.
"Companies are asking their employees to come back a few days a week at a minimum... reorient our space to adapt to the new environment."
— Jonathan Kaiser [08:37]
He advises early evaluation and strategic renegotiation to ensure leases align with current and projected business requirements, emphasizing the importance of creating competitive leverage in negotiations.
Strategic Lease Renewals and Negotiations
When it comes to lease renewals, Kaiser offers practical advice for businesses:
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Start Early: Initiate lease evaluations at least 18 months in advance to allow ample time for relocation or negotiation.
"We recommend 18 months at a minimum... it gives you a credible threat of relocation."
— Jonathan Kaiser [12:11] -
Understand Holdover Rates: Be aware of penalties for staying beyond lease terms, which can significantly impact negotiating power.
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Flexibility and Negotiation: Contrary to brokers’ claims, most lease terms are negotiable. Kaiser debunks the notion of "standard" terms, advocating for comprehensive negotiations to secure favorable conditions.
"The idea that somehow 10 other tenants did this... is asinine. You can negotiate nearly everything in a lease."
— Jonathan Kaiser [13:48]
Success Stories and Impact
Kaiser shares compelling examples of how Kaiser International has successfully negotiated leases, saving clients substantial amounts and enhancing their flexibility:
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Case Study 1: Saved a client $1 million by renegotiating an entire lease within 30 days without relocating.
"Saved $1 million that was in an almost impossible situation."
— Jonathan Kaiser [17:47] -
Case Study 2: Secured a $2 million saving by incorporating a right to contract in the lease, providing clients with the option to terminate leases if necessary.
"Saved our client $2 million by building in a right to contract."
— Jonathan Kaiser [17:47]
Fee Structure and Global Reach
Kaiser International operates on a commission-based fee structure, aligning their incentives with their clients'. They pay a percentage of the overall deal, ensuring advocacy without additional costs.
"Whether or not you have representation, it's typically the same fee being paid... you get to make sure that you're getting advocacy for the fee that's already built into the deal."
— Jonathan Kaiser [15:39]
With a robust global presence, Kaiser International caters to mid-market companies with facilities worldwide, helping them optimize their real estate strategies and negotiate better terms across diverse markets.
Final Thoughts and Call to Action
As the episode concludes, Kaiser underscores the importance of reevaluating existing leases, regardless of whether companies are currently seeking changes. He offers a free strategy consultation to assess and enhance their real estate arrangements.
"Your existing lease is your worst case scenario... we'd improve it and at a minimum, you'll walk away with some cool ideas."
— Jonathan Kaiser [20:12]
Herold echoes this sentiment, highlighting the expertise and value Kaiser International brings to businesses navigating the complex commercial real estate landscape.
Key Takeaways
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Tenant Representation is Crucial: Having a dedicated representative like Kaiser International can significantly improve lease negotiations, ensuring businesses secure favorable terms and cost savings.
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Early Planning: Initiating lease evaluations and negotiations well in advance prepares businesses for flexibility and leverage.
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Everything is Negotiable: Unlike common misconceptions, most lease terms can be negotiated to better fit a company's evolving needs.
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Strategic Flexibility: Incorporating terms that allow for lease termination or expansion provides businesses with necessary adaptability in a changing work environment.
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Global Expertise: Kaiser International's extensive network and experience make them a valuable partner for businesses with multi-location operations.
Notable Quotes
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Jonathan Kaiser [05:00]: "The big firms, 80 to 90% of the revenue comes from representing the landlord... 100% of our revenue comes from representing the tenant."
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Cameron Herold [04:32]: "You're not out there negotiating with these big landlords... they know how to really negotiate, and you don't even have an idea as to where you can do well."
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Jonathan Kaiser [13:48]: "You can negotiate nearly everything in a lease."
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Jonathan Kaiser [17:47]: "Saved $1 million that was in an almost impossible situation... Saved our client $2 million by building in a right to contract."
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Jonathan Kaiser [20:12]: "Your existing lease is your worst case scenario."
Conclusion
Episode 457 offers invaluable insights into the world of commercial real estate from a tenant-centric perspective. Jonathan Kaiser's expertise and Kaiser International's strategic approach provide businesses with the tools and knowledge necessary to navigate lease negotiations effectively, ensuring financial savings and operational flexibility. For COOs and second-in-command executives looking to optimize their company's real estate strategy, this episode serves as a must-listen resource.
Connect with Kaiser International:
For more information or to schedule a free strategy consultation, visit Kaiser International or reach out directly to Jonathan Kaiser.
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