How Commercial Real Estate Brokers Can Leverage Otso in their Business
Whether you’re representing tenants in their space needs or Landlords to drive new leases and retention Otso can supercharge your deal-making.
Representing users and owners of commercial real estate isn’t easy. Beyond the efforts of prospecting and qualifying (a post for a different day) being the fiduciary for a company or property owner is a serious and intense assignment for brokerage professionals. How many times have you got down the road on a deal only to have it get sideways (or worse) when finalizing a lease? The facts are simple:
- The majority of Landlords lack an effective way to properly assess a businesses ability to perform in a lease.
- Asking for projections, unaudited financials and sources/uses spreadsheets usually doesn’t help the cause and is a pain on the prospective tenant.
- Due to this lack of comfort, Landlords often ask for “more” than they need for security deposits. Cash, LOC’s or other guarantee forms become onerous on the Tenant.
- Brokers get stuck negotiating something that they really shouldn’t be responsible for, financial worthiness.
Otso solves these pain points, efficiently. Our application process for tenants provides landlords with a far more useful and relevant assessment of a business’s ability to pay rent (our algorithm is based on cash, history and business credit). It’s built to assess commercial tenants projected lease performance quickly and fairly.
When a business passes our standards we’re willing to take the risk for up to $50,000 in deal costs on behalf of our approved tenants. Our guarantees provide the Landlord with coverage from a AA-rated credit insurer in the event of a default. That’s cash the tenant doesn’t need to lock up in a deposit, so it can go towards TI, operations or whatever they need it for. Otso provides Landlords with the comfort of coverage and credit, in minutes.
Imagine closing the gap on a deal by getting financials reviewed the very same day, better yet, being able to tell your client you have saved them up to $50,000 in cash they can keep in their accounts, like it should be.
How do I refer a client to Otso/How does that work?
You can send your client this link, it’s a great place for them to learn about the program. If this is something you want to have your client leverage in your next deal we need to get the Landlord on board. This is usually as simple as an introduction, you can make one using the “Introduce Us” button from the link above. One onboarded the Landlord (or representative) will send your client a link to apply, this takes less than five minutes and approvals usually happen that same day.
It’s 100% free to Landlords to use Otso, and even with an application there is no obligation for either tenant or landlords to use the guarantee in the deal. Guarantees only go “live” when both parties wish to move forward and we all sign the documents with the lease.
What does it cost my client?
This is a good question and one we hear a lot. Otso Guarantees are negotiated into the rent of the lease itself, they depend on a variety of factors but a good number to use in your mind is roughly $100/month for every $10,000 Guaranteed. Think you can close more deals for such a nominal fee? Yea, us too 🙂
Do you share the exact pricing of a Guarantee?
Since Landlords are the one ultimately paying for these Guarantees, we don’t share the pricing with the Tenant directly. We leave that choice up to individual landlords. However, Otso Guarantees are so nominal is comparison to actual rental costs in a deal they usually provide no-friction in our experience. Here’s an example of what an Otso Guarantee might cost.
- 3,000 S.F. Lease
- $35/PSF/YR Rate
- $12,000 Security Deposit
Example Otso Guarantee Costs:
$80-120/month or $.03-04 PSF/Month.
We know most brokers are going to negotiate the costs of this right out, and that’s their right (among many other negotiable points). We leave it to the Landlord to offer the value of the Otso Guarantee in a “deposit-free” rate while letting the ultimate deal economics get hashed out by the parties at hand.
In our experience, less than five cents a month doesn’t slow down a deal…especially when the client/tenant is keeping $12,000 in their pocket and the previous friction of financial assessment is gone from the start.
Add Otso to your tool box and let’s help you close more deals, contact us to get started.
Have more questions? Visit our Help Center, it’s a great resource to learn about Otso.