Commercial Real Estate FAQs - Texas

Tenant representation is where a commercial real estate broker works exclusively for the tenant — the business seeking to lease or purchase space. Their sole obligation is to secure the best possible outcome for the tenant: right space, right terms, deal that supports the business. This is fundamentally different from a listing broker, who represents the landlord.

Free. In the overwhelming majority of commercial lease transactions in Texas, the landlord pays the brokerage commission. That commission is split between the listing broker and the tenant’s broker. You get professional negotiation and market expertise at no direct cost. The landlord already budgeted for this commission — the only question is whether you have someone spending it on your behalf.

The listing broker represents the landlord. Their job is to get the best deal for the landlord — not for you. Under Texas law, that broker can serve as an intermediary, but their fiduciary relationship began with the property owner. A dedicated tenant rep costs you nothing and works solely for you. There’s no upside to going without representation.

Allow 90–180 days from search to occupancy. Smaller deals under 3,000 SF can close in 60 days. Larger deals with significant tenant improvements can take 6 months or more. Starting 6–9 months before your lease expiration is the single most effective way to maximize leverage.

More than most tenants realize. Negotiate: free rent periods, tenant improvement allowance (landlord-funded build-out dollars), renewal option pricing, operating expense caps, early termination rights, personal guarantee scope, parking, signage, and permitted use. In a competitive deal, non-rent terms can be worth significantly more than a rent reduction.

Southlake’s commercial market includes Class A and Class B professional office, medical office, mixed-use retail and office, and flexspace. The market is supply-constrained — limited developable land keeps vacancy below most DFW submarkets. Particularly strong for professional services, healthcare, financial services, and client-facing businesses.

Grapevine has a diverse commercial market given proximity to DFW International Airport. Office, hospitality, industrial, and retail across multiple corridors. The Airport Business Park and Highway 121 corridor are active for flex and industrial. The Grapevine historic district offers retail and restaurant opportunity.

Keller offers primarily flexspace, light industrial, and retail. An attractive suburban market for service businesses, healthcare providers, and light manufacturing. More land availability than Southlake or Grapevine.

You’re not legally required to, but it’s strongly advisable. Commercial transactions involve zoning analysis, environmental due diligence, title review, lease analysis, financial underwriting, and negotiation. In most transactions, the seller pays the buyer rep commission — making professional representation effectively free to the buyer.

A cap rate (capitalization rate) is the ratio of a property’s net operating income to its purchase price. A property generating $100,000 NOI purchased for $1,500,000 has a 6.67% cap rate. Lower cap rates = higher prices relative to income. DFW cap rates currently range from approximately 5.0% (prime NNN retail) to 8.0%+ (value-add assets) depending on asset class, location, and tenant quality.

A triple net lease is where the tenant pays base rent plus all three “nets” — property taxes, building insurance, and maintenance costs. Common in single-tenant retail and some industrial properties. Popular with investors because it minimizes landlord management responsibilities and creates predictable cash flow.

550 Reserve Street, Suite 190, Southlake, TX 76092. We serve clients throughout Northeast Tarrant County and the greater Austin metro.

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